Sistema Shyam TeleServices Ltd (SSTL) today announced the allotment of shares to the Russian Federation. The company issued 54,73,12,918 equity shares to the Federal Agency for State Property Management of the Russian Federation ("Rosimushchestvo") against the funds equivalent of INR 26,988 million (i.e. US$ 600 million approx) received in December 2010.
All formalities relating to the allotment of shares were however completed on 25th March, 2011. 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, launched in middle of February, 2011 and closed on 8th March, 2011 was done to accommodate the foreign direct investment by the Russian Federation (RF) into SSTL. The rights issue was open to all existing share holders of SSTL excluding Sistema (LSE: SSA). The objective of opting for the rights issue was to provide equal opportunity to all the existing shareholders in the new proposed equity structure of the company. With all formalities relating to the rights issue complete and with the allotment of shares to RF also getting closed, the paid up capital of SSTL now stands at INR 3193.92 crores.
According to Vsevolod Rozanov, President and CEO, Sistema Shyam TeleServices Ltd "We at SSTL are delighted to have received an over whelming 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. Going forward, the challenge is to further accelerate the proliferation of our telecom services nationally, in sync with our data centric, voice enabled strategy. "
The revised holding structure of SSTL is as follows:
Russian Federation : 17.14%
Sistema (LSSE: SSA) : 56.68%
Shyam Group : 23.98%
Public : 2.2%
Prior to the allotment of shares to RF, equity held by Sistema (LSSE:SSA) in SSTL was 73.71%.
The new capital structure has been registered with the Registrar of Companies and has also been updated in company's data available on the Ministry of Corporate Affairs portal of The Government of India. It may be recalled that SSTL had long back obtained FIPB approval for the Russian Federation's investment. Additionally, SSTL had also secured all other approvals to appropriately accept the RF investment.
SSTL plans to utilize 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 the branded retail network across the various telecommunication circles and to further accelerate the proliferation of the company's telecom services in a number of new circles.
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