Press Trust of India / New Delhi Jan 12, 2012, 14:06 IST
At a time when most telecom companies are finding it hard to raise funds, Sistema Shyam TeleServices Ltd (SSTL) that offers telecom services under the MTS brand has raised a loan of Rs 1,280 crore from Deutsche Bank and the amount will be utilised to scale-up its operations and repay maturing loans.
The company has raised a loan amounting to Rs 1,280 crore through Non-Convertible Debentures (NCD), SSTL said in a statement.
"We are planning to utilise the proceeds to further scale-up our telecom operations and repayment of maturing loan. We are very thankful to our banking partner -- Deutsche Bank -- for its trust and support," SSTL Chief Financial Officer Sergey Savchenko said.
The company claims to have a subscriber base of over 15 million mobile users, besides 1.2 million data users.
Deutsche Bank is the lead banker of the issue and the tenor of the entire amount is eight years, repayable by 2019, the company said.
"It was quite challenging to raise such significant funds with such long tenor under the current uncertain regulatory environment in India, but business has to continue and grow. This is the next step after raising a Rs 920 crore loan from Barclays Bank and ICICI Bank in September last year and we currently have several other facilities in the pipeline," Savchenko added.
The Indian telecom sector is struggling with a huge cash crunch in the backdrop of the 2G scam, which has impacted the credibility of telecom companies, making it difficult for them to raise money.
SSTL is a joint venture in which Russia-based Sistema holds a 56.68% stake, while the Russian government holds 17.14%, Shyam Group of India another 23.98% and the remaining 2.2% is held by the public.
Last year, SSTL received a loan totalling $200 million (Rs 920 crore) from ICICI Bank and Barclays Bank.
The loan is payable within three years, by 2014.
The Russian government had made a $600 million capital infusion in the company to pick up a stake in 2010.
MTS has secured over 15 million wireless subscribers in India and provides mobile broadband services to more than 1,200,000 customers in over 200 cities across the country under the MBlaze brand.
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At a time when most telecom companies are finding it hard to raise funds, Sistema Shyam TeleServices Ltd (SSTL) that offers telecom services under the MTS brand has raised a loan of Rs 1,280 crore from Deutsche Bank and the amount will be utilised to scale-up its operations and repay maturing loans.
