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Russia defers $677m Sistema Shyam loan
13 January 2010
The Russian government is postponing plans to invest $677 million in Indian operator Sistema Shyam, which is controlled by Russian group Sistema
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The Russian government has postponed its proposed $677 million capital investment in Indian mobile operator Sistema Shyam TeleServices.
The operator — which is controlled by Russian conglomerate Sistema and uses its MTS brand in India — had offered to sell the Russian government a 20% stake before the end of 2009. The proceeds will be used to fund new base stations as it broadens its subscriber base of three million.
The Russian government’s cash injection will be a financing deal as it includes a pledge by Sistema to acquire the shares in five years’ time. The government requires the consent of three ministries before the end of 2010.
If Russia proceeds with the investment, it will either have to alter the 2010 budget or involve a state-controlled bank, such as VEB.
Sistema has 73.71% stake in Sistema Shyam, while India’s Shyam Group owns 23.79%. The remaining stake in the company is held by minority shareholders. GTB