Sistema Shyam in talks to raise $300-400 mn to fund expansion

Sistema Shyam TeleServices, a joint venture between Russia's Sistema and India's Shyam Group, today said it is negotiating with various financial institutions to raise around Rs 1,350-1,800 crore for its expansion plans.

The funds will be used mainly towards the expansion of operations in 12 circles in the country, Sistema Shyam TeleServices (SSTL) President and Chief Executive Vsevolod Rozanov told reporters here.

SSTL provides mobile service under the brand name MTS.

"We are in touch with our Russian government to dilute around 20 per cent stake to raise around $700 million.

"We are also in talks with some of the Indian banks to raise around $300-400 million to fund our short-term growth plans lined up this year," Rozanov said.

The company will complete setting up of network in all the 22 telecom circles by the year-end, he said.

Rozanov said currently they are present in 12 circles and the remaining 10 will be covered by the end of 2010.

"We have necessary licences on hand and infrastructure is in place in every circle. We will launch services in all the circles before the end of the year," Rozanov said after announcing the launch of its MTS code division multiple access (CDMA) services in Andhra Pradesh.

The company will be investing Rs 400-500 crore in each of the four southern states.