SSTL expects Russian fund infusion by October

SSTL expects Russian fund infusion by October BS Reporter / New Delhi September 07, 2010, 1:07 IST Sistema Shyam Teleservices (SSTL), which offers mobile services in India under the brand name MTS, expects the Russian government to infuse $620 million in the company by October this year. “The documents are with the Prime Minister’s office. We expect a decision to come later this month or early October. The investment will be about $620 million,” SSTL Chief Executive Officer Vsevolod Rozanov said.  Click here to visit SME Buzz   Also Read   Related Stories News Now - Markets stage a smart rally - FIIs net buyers Rs 3,860 cr in F&O on Monday - Asian markets trade flat - Indian ADRs gain on Monday - Kansai plans Rs 600 cr capex, ropes in SRK as brand face More The company’s board would then discuss the initial public offer (IPO) plan by the end of this year or early next year. SSTL, which offers CDMA-based mobile services in the country, is a joint venture between Russia’s Sistema and India’s Shyam Group. Sistema has a 73.71 per cent stake in the joint venture, the Shyam Group holds 23.79 per cent and the remaining 2.5 per cent stake is held by the public. “For regulatory purposes, the capital structure should be frozen before the IPO. As soon as the capital structure is fixed after the Russian government’s investment, a decision will be taken on IPO by end of this calendar year or early next year,” Rozanov said. The company was also likely to announce a telecom network outsourcing deal later this week, Rozanov said, without giving details. The company currently operates in 12 circles and has about 6 million users. The Russian government was to invest about $670 million for buying a stake of about 20 per cent in the company. The amount has now come down to $620 million on account of the change in valuations. Although the Russian government deal was scheduled to close in 2009, and funds for the acquisition were earmarked in the 2009 budget, the process got delayed. This prompted the Russian government to vote again and transfer the sum to the 2010 budget. The Russian government will be utilising part of the rupee-rouble trade reserve balance of $2 billion in the Reserve Bank of India for procuring SSTL shares. The company today announced the launch of three smartphones priced between '4,999 and '13,500 each.