Sistema Shyam allots over 54.73 crore shares to Russian govt | business | Hindustan Times
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Sistema Shyam allots over 54.73 crore shares to Russian govt

business Updated: Mar 30, 2011 13:53 IST

Sistema Shyam, a joint venture between Russian Sistema and India's Shyam group, on Wednesday issued 54,73,12,918 equity shares to the Russian government against USD 600 million received in December 2010.

The company offers mobile service across various circles under the brand MTS and claims to have secured over 10 million wireless subscribers. Under the MBlaze brand, it provides mobile broadband services to more than 500,000 customers in over 130 towns across the country.

All formalities relating to the allotment of shares have been completed, a company statement said, adding, "Prior to this share allotment, SSTL also issued 19,06,49,582 equity shares to its existing shareholders including the Indian promoters, i.e. the Shyam Group."

The rights issue was done to accommodate the foreign direct investment by the Russian Federation into SSTL. The rights issue was open to all existing shareholders of SSTL, excluding Sistema, it said.

With all formalities relating to the rights issue and with the allotment of shares to Russian Federation also getting closed, the paid up capital of SSTL now stands at Rs 3,193.92 crore.

As per the revised holding structure of SSTL, the Russian Federation holds a 17.14% stake, Sistema 56.68%, Shyam Group 23.98% and the remaining 2.2% is held by the public.

The new capital structure has been registered with the Registrar of Companies and has also been updated in data on the company available with the Ministry of Corporate Affairs.

"We at SSTL are delighted to have received an overwhelming response from all our existing shareholders to the rights issue. Additionally, with formalities relating to the allotment of equity shares to the Russian federation also getting completed, it truly represents a major milestone.

"Both these developments are a testament to the faith reposed by all the shareholders in our company, which now has over 10 million customers," Sistema Shyam TeleServices Ltd President and CEO Vsevolod Rozanov said in a statement.

It may be recalled that SSTL had earlier obtained FIPB approval for the Russian Federation's investment.

SSTL plans to utilise all the funds to finance the continued development of the company and in particular to strengthen its leading position in wireless broadband. The funds will also be used to expand its branded retail network across various telecommunication circles and to further accelerate the proliferation of the company's telecom services in a number of new circles.

Rozanov said going forward, the challenge is to further accelerate the proliferation of our telecom services nationally, in sync with the company's data-centric, voice-enabled strategy.