BackSistema to buy back 17% of Indian unit Sistema Shyam TeleServices from Russia govt
Payment for the shares will be made to the Russian federal budget in instalments over a period of five years, Sistema said
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Mumbai: Sistema JSFC, a publicly traded diversified holding company operating primarily in Russia, has agreed to buy back 17.14% of telecommunications operator Sistema Shyam TeleServices Ltd (SSTL), a unit of Sistema in India, in five phases by 2020.
The Russian company on Monday 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% of SSTL".
“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," Sistema said in a statement posted on its website.
The Russian Federation acquired 17.14% of SSTL shares in March 2011 and simultaneously concluded an option agreement with Sistema to sell these shares back to the company after a period of five years for $777 million or the market value determined by an independent valuator, whichever is higher.
In November 2015, Reliance Communications Ltd (R-Com), India’s fourth largest mobile services provider, said it is buying the local unit of Russia’s Sistema in a deal valued at ₹ 4,500 crore in stock and payments to the government for spectrum allotted to Sistema, a transaction that may herald the much-anticipated consolidation in India’s telecom industry.
R-Com, a part of Anil Ambani’s Reliance Group, signed a definitive agreement with the Russian company in November 2015 to acquire SSTL in a transaction under which the latter will take a 10% stake in R-Com.
After the closing of the deal, minority investors in SSTL will be given the option of exchanging their shares in the company with pro-rata R-Com shares held by SSTL.
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