News
Government acquired 17.14% of Sistema Shyam Teleservices in 2011 for $600 million.
Sistema late on Monday agreed to buy back a 17.14% stake in its Indian unit Sistema Shyam Teleservices (SSTL) from the Russian government.
Russia’s Federal Agency for State Property Management paid $600 million (€542.5 million) for the stake in March 2011 as part of a capital increase by SSTL that raised $647 million in total.
The deal came with the option for Sistema to buy back the shares after five years for $777 million, or fair market value, whichever was higher.
Sistema did not disclose the value of Monday’s transaction. It will pay for the stake in instalments over the next five years.
Sistema is in the process of selling SSTL to Indian rival Reliance Communications.
The proposed deal will see RCom absorb SSTL, while Sistema will take a 10% stake in RCom.
RCom will also assume SSTL’s spectrum licence fee obligations, which amount to payments of 3.92 billion rupees (€54 million) per year for the next 10 years to the Department of Telecommunications (DoT).
Shareholders of both RCom and SSTL approved the transaction in March.
