Russia may buy 20% in Sistema Shyam by Oct

NEW DELHI: The Russian government is expected to complete its pending transaction to pick up a 20% stake in telecom firm Sistema Shyam for around $670 million by October, a top company executive said. “Our immediate funding requirements will be taken care of with this investment,” Vsevolod Rozanov, CEO of Sistema Shyam, said on Wednesday.

At present, Russian operator Sistema owns 73.71% in Sistema Shyam Teleservices, while Shyam Group owns the rest. As per the deal, Sistema will sell a 20% stake to the Russian government. The operator would then start the process to list the company, Mr Rozonov said. “We need to put in place the capital structure first. Then we will take up the IPO,” he added.

The Russian government had planned to pick up the stake in the company last year, but the deal was delayed as the country’s economy ministry did not approve the investment. It received all the necessary approvals in April.

Sistema Shyam is among the nine companies which bagged pan-India telecom licences in early 2008. The CDMA-based telco crossed the five-million subscriber mark in May and expects to double the number by the year-end.