Sistema Shyam awaiting India OK for new share issue to Russian govt : Dow Jones Newswires

R. Jai Krishna and Dhanya Ann Thoppil, Dow Jones Newswires
Monday 16 November 2009

Indian operator says it expects government approval for $600 million share issue by December.

Telecommunications company Sistema Shyam TeleServices Ltd. is awaiting clearance from India's investment board for its proposal to issue new shares of about $600 million to the Russian government, a senior executive at the company said Monday.
"We have already applied for the foreign investment promotion board (FIPB) and other kind of clearances," T. Narasimhan, deputy chief executive at Sistema Shyam, told Dow Jones Newswires, without elaborating.
Narasimhan expects government approval to come through by December.
The FIPB regulates all foreign direct investments into India.
The Russian government has already allocated the funds in its annual budget statement for buying a stake in Sistema Shyam, Narasimhan said.
Russia's Sistema JSFC owns 73.71% of Sistema Shyam, while India's Shyam Group holds 23.79%, with the public holding a minority.
In October, Cheremin Sergei, deputy chairman of Sistema JSFC, said Sistema Shyam could offer a 20% stake to the Russian government.

The Russian government is planning to use part of the reserve balance of $2 billion currently parked with the Reserve Bank of India--which it has to invest in projects in India--for the Sistema Shyam investment, Sistema Shyam chief executive Vsevold Rozanov had earlier said.
Sistema Shyam is one of the newer entrants to India's mobile phone market, the world's fastest-growing market based on the number of subscriber additions.

It operates mobile phone services on the code division multiple access, or CDMA, technology in eight of India's 22 telecom service areas and had 2.1 million users at the end of September.
It competes with CDMA operators Reliance Communications Ltd. and Tata Teleservices Ltd., which have 73 million and 47.8 million subscribers, respectively.