By Telecom Lead Team: Sistema Shyam TeleServices (MTS
India) has raised a loan of INR 1,280 crore through Non Convertible Debentures
(NCD). The mobile operator is planning to utilize the proceeds to scale up its
telecom operations and repayment of maturing loan.
Deutsche Bank is the lead banker of the issue. This issue
has been partially secured by guarantee of one of Russia’s leading bank,
Sberbank.
In October 2011, MTS India received
a loan of $200 million. As part of the process, $100 million was raised from
ICICI Bank and remaining $100 million was raised from Barclays Bank. This loan
has been proportionally secured by Russia’s leading bank, Gazprombank through a
standby letter of credit and bank guarantee.
It was quite challenging to raise such significant funds
with such long tenor under current uncertain regulatory environment in India,
but business has to continue and grow. This is the next step after raising INR
920 Crore loan from Barclays Bank and ICICI Bank in September last year and we
currently have several other facilities in pipe-line. We are planning to
utilize the proceeds to further scale up our telecom operations and repayment
of maturing loan,” said Sergey Savchenko, chief financial officer of Sistema Shyam Teleservices.
The entire amount of INR 1,280 crore has been received by
SSTL. The 8 year debt is payable by 2019.
This is a significant development for the telecom
industry as several financial institutions are cagey about offering funds in
the wake of ongoing 2G scam investigations. Lack of funds from banks and other
financial institutions has prompted telecom operators to go slow with their
expansion plans in the Indian telecom market.
