Russian conglomerate Sistema JSFC today said it will acquire Russia Government’s 17.14 per cent stake in Sistema Shyam TeleServices Limited (SSTL) for an estimated $777 million.
Sistema currently holds 56.68 per cent stake in SSTL, which offers mobile telephony services under the MTS brand across nine telecom circles in India, and 23.98 per cent is held by its Indian partner Shyam Group. The remaining is with other Indian partners and minority stakeholders.
SSTL is under process to merge its business with Reliance Communications. The company is estimated to hold around 10 per cent in the resultant entity.
In a statement, Sistema JSFC said, “It has signed an agreement with the Russian Federation, represented by the Federal Agency for State Property Management, whereby the company will acquire 17.14 per cent of the shares of telecommunications operator SSTL.”
Under the agreement, payment for the shares will be made to the Russian federal budget in instalments over a period of five years with 30 per cent in 2016, 25 per cent in 2017, and 15 per cent each in 2018, 2019 and 2020.
The Russian Federation had acquired 17.14 per cent of SSTL shares in March 2011, and simultaneously concluded an option agreement with Sistema to sell these shares back to Sistema after a period of five years for the higher of $777 million or the market value determined by an independent valuator.