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Russia to buy $677m Sistema Shyam stake
24 June 2010
The government of the Russian Federation is completing its delayed proposal to buy a 20% stake in Russian controlled Indian operation Sistema Shyam
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Sistema Shyam
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The Russian Federation is acquiring a 20% stake in Indian mobile operator Sistema Shyam Teleservices for $677 million.
The government, which had planned to acquire the stake in the company by the end of 2009, delayed the process as the country’s economy ministry did not approve the investment.
The company is 73.71% owned by a Russian operator, Sistema, while India’s Shyam Group owns the rest.
Sistema Shyam had planned to sell 662 million shares to the Russian Federal Property Agency and up to 228 million shares to its Indian founders, in December 2009.
Sistema Shyam markets its services in India under the MTS brand, a name also used by a mobile company in Russia in which Sistema has a major interest.
The deal, which will reduce Sistema’s stake in the Indian company to nearly 54%, will help Sistema Shyam keep the total foreign stake in it below the government-mandated limit of 74% for Indian telecom companies.
Sistema Shyam, which currently provides mobile services on the CDMA platform in 12 of India’s 22 telecom service areas, had more than 5 million users at the end of May 2010. GTB