Fitch Ratings has said the new Rs 1,300-crore term loan of telecom operator Sistema Shyam Teleservices Ltd (SSTL), which operates in 12 circles in India, has high credibility on repayment of debt to lenders.
Fitch assigned the loan, secured from a consortium led by State Bank of India, 'A-' rating, which denotes that risk of default by the company is low.
The rating agency also said this rating on the debt has a stable outlook.
SSTL is a joint-venture between Russia's Sistema and India's Shyam Group and provides mobile services under the brand name of MTS.
"Fitch Ratings has assigned SSTL's Rs 1,300-crore term loan (from a consortium led by State Bank of India), a national long-term rating of 'A-'. The rating is based solely on the unconditional and irrevocable corporate guarantee from SSTL's parent, Sistema," Fitch Ratings said.
The telecom operator has 12 operational circles and expects to start services across the remaining circles by next year. It plans to launch services in UP (east), UP (west) and Gujarat by the end of this calendar year.
SSTL has license and the required spectrum to roll out services in 22 telecom circles in the country, and is in the process of commencing its pan-India telecom services network.
Sistema has a 73.71 per cent stake in the joint venture, while Shyam Group holds 23.79 per cent in the company and the remaining 2.5 per cent is held by the public.
Fitch said it has taken into account weak stand-alone credit profile of SSTL ended last fiscal with a net loss of Rs 1,460 crore.
Earlier this month, the Russian government had said that it will pick up about 20 per cent stake for $600 million (Rs 2,793 crore) in SSTL. Once the injection of equity is carried out, Sistema's stake will fall to 56 per cent.
