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| DoT nod for Russian govt's 20% stake buy in Shyam Sistema |
| Press Trust of India / New Delhi Nov 23, 2009, 19:16 IST |
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The Department of Telecom (DoT) has 'no objection' to the Russian government picking up 20 per cent stake in telecom service provider Sistema-Shyam Telecom (SSTL) for a little over $676 million (Rs 3,200 crore).
"SSTL is permitted to bring in foreign equity by issue of fresh shares as per the Lock-In principles of the DoT," the department said, responding to a Foreign Investment Promotion Board (FIPB) querry where the proposal has been pending.
A DoT note to the FIPB said SSTL has sought approval for FDI up to 20 per cent by the Federal Agency for State Property of Russian Federation into the company by subscription of up to 66.27 crore fresh equity shares of nominal value of Rs 10 a share at the rate of Rs 49.31 per share approximately for an investment of up to $676 million.
The Indian promoters, it further said, have also proposed to infuse additonal equity to keep 26 per cent Indian shareholding.
SSTL, currently operating in six circles, is in need of huge funds for a pan-India expansion.
Post transfer of the equity by the Russian government, Sistema's holding in the JV will go down to about 54 per cent. Sistema will still have a majority stake and enjoy management control of the company.
There will be no changes in the shareholding of Shyam, which will continue to have a 26 per cent equity in the JV.
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