Sistema Shyam TeleServices Ltd (SSTL) on Wednesday said that it has raised Rs 194 crore through a rights issue subscribed by all the current shareholders. The joint venture company between Shyam Group and Sistema has also completed the stake sale to the Russian Government.

The Federal Agency for State Property Management of the Russian Federation (Rosimushchestvo) had earlier announced plans to pick up 17. 14 per cent stake in SSTL for $600 million. As a result, Sistema's stake in SSTL has dropped to 56.68 per cent from 73.71 per cent earlier. The company issued 54,73,12,918 equity shares to Rosimushchestvo against the funds received in December 2010.

SSTL plans to utilise 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.

“All formalities relating to the allotment of shares were however completed on March 25, 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,” said a press statement.

The rights issue, launched in middle of February, was done to accommodate the foreign direct investment by the Russian Federation 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,” the statement added. The paid-up capital of SSTL now stands at Rs 3,193.92 crore.

According to Mr Vsevolod Rozanov, President and CEO, Sistema Shyam TeleServices Ltd: “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 new capital structure has been registered with the Registrar of Companies and the stake sale has the approval of the Foreign Investment Promotion Board.

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