Russia’s government will pour $677 million (€551 million) of much-needed cash into Russian operator Sistema's Indian mobile unit, Sistema Shyam.
The Russian parliament-duma has already approved the proposal to purchase a 20% stake in the Indian cellco, according to the WSJ, with the funds tipped to be paid by October.
Russia originally planned to make the investment in 2009, but was forced to delay until it gained approval from the country’s economy ministry.
With Sistema Shyam not expecting to become ebitda positive until 2012, the operator needs a source of funding for its expansion plans.
The cellco hopes to be able to cover all 22 circles in India by the end of the year. It operated in 11 circles as of last month.
Sistema holds a 74% stake in Sistema Shyam, with the Shyam group holding 23.8%.
The carrier intends to issue 662.75 million shares to the Russian agency, and 228.5 million shares to the company's Indian founders – an essential move to meet Indian laws that prevent foreign firms owning more than 74% of a mobile operator.
After these transactions clear, Sistema's holding will be reduced to 54%.