Sistema Buys Out Russian Government Stake in India's MTS
Published on: 28th Jun 2016
Russia's Sistema is buying the 17.14% stake in India's Sistema Shyam Tele Services Ltd (SSTL) currently owned by the Russian government.
Sistema currently owns 56.68% of SSTL, which offers mobile phone services under the MTS brand.
Although Sistema did not say how much it is paying for the stake, a deal agreed back in 2011 lets the Russian government sell the stake for at least USD777 million.
"Under the agreement, payment for the shares will be made to the Russian federal budget in instalments over a period of five years as follows: 30% in 2016, 25% in 2017 and 15% in each of 2018, 2019 and 2020," the company said in a statement.
The move comes as SSTL is in the process of merging its teleccom operations with Reliance Communications (RCom). SSTL shareholders will be left with about 10 percent of the enlarged company following the mergers.
The deal will give Rcom an additional 9 million data subscribers, USD230m in revenue and access to efficient 800MHz/850MHz spectrum in eight Indian regions, or circles.
The tidying up of the shareholder stake also means that the Russian government is no longer a direct shareholder in the Indian telecoms market.