Sistema Shyam Teleservices is planning to raise upto $2 Bn from Chinese, Japanese and Indian banks for funding their expansion plans. SSTL, which recently launched MTS is also planning to float an IPO(here).

The funds will be used to buy Chinese telecom equipments and meeting capital expenditure and working capital needs.

SSTL is talking to China Export & Credit Insurance Corporation (Sinosure) for a $980 Mn loan with a repayment period of 10 years. It is also talking to Japanese banks for a $1 Bn loan.

SSTL CEO Vsevold Rozanov said that the company was working with banks to raise funds but denied on raising $ 2 Bn.

Japan’s Sumitomo Mitsui Bank is the lead banker for the fund-raising exercise.

SSTL has also raised Rs 228 Cr from the Indian promoters. The allotment of shares to the Indian promoters - Shyam Telecom has been done to keep its total FDI below the government-set limit of 74%.

SSTL is a JV between Sistema of Russia and Shyam Group of companies. Sistema holds 73.71%,while Shyam Telecom holds 23.79% in the company.

Sistema Shyam Teleservices Ltd was founded in 1998 and has over 1 Mn users spread over Rajasthan, Tamil Nadu, Kerala and West Bengal. It obtained a pan India license in March 2008 and has launched its service in Mumbai yesterday under the brand name MTS.