CDB provides $255 million loan to Sistema Shyam for the purchase of telecommunication equipment (Linked to Record ID#67447)

Project narrative

On December 23, 2009, Sistema Shyam TeleServices Limited (SSTL) entered into a facility agreement with the China Development Bank Corporation allowing borrowings of up to approximately $255 million. The loan was provided to finance telecommunication equipment supplies. The facility has a maturity of 2017 (8-year maturity period) with a grace period of 3 years. The interest rate is LIBOR +1.5% (2.31%). As of December 31, 2011, the total outstanding amount of the facility was $250.36 million. It has been assumed that the entire amount was drawn down and that SSTL repaid around $4 million of the facility. The facility is guaranteed by Sistema JSFC. Non-compliance with the covenants of the facility agreement with the China Development Bank Corporation, in addition to other events, may constitute an event of default. These other events include: (i) any creditor becoming entitled to declare the debt of SSTL (and its subsidiaries) or Sistema JSFC over a certain amount due and payable as a result of an event of default provided that such default has continued for a specified period of time; (ii) the termination, suspension or cancellation of any authorization or licence of SSTL to provide wireless telephony services, or the modification or renewal of any such licence, in each case which would have a material adverse effect on the business, operations, assets or financial condition of SSTL or Sistema JSFC; (iii) the commencement or threat of any litigation, arbitration or administrative proceeding of or before any court, arbitral body or agency against SSTL, any of its subsidiaries or Sistema JSFC, which, if adversely determined, might reasonably be expected to have a material adverse effect on the business, operations, assets or financial condition of SSTL or Sistema JSFC; (iv) any event or circumstance which has a material adverse effect on the business, financial condition, results of operations or prospectus of SSTL or Sistema JSFC; (v) any legal proceeding initiated with a view to the seizure, compulsory acquisition, expropriation or nationalisation of all or a material part of the undertakings, assets, rights, revenues or shares of SSTL; (vi) any breach of representation (which automatically repeat on each draw-down request date and on each interest payment date), including (without limitation) a representation that no litigation has been commenced which, if adversely determined, might reasonably be expected to have a material adverse effect on the business, financial condition, results of operations or prospectus of SSTL or Sistema JSFC; and (vii) any expropriation, attachment, sequestration, distress or execution that affects any asset or assets of SSTL or any of its subsidiaries or Sistema JSFC. On January 14, 2016, Reliance Communications announced that it had acquired Sistema Shyam TeleServices Limited (SSTL, operating as MTS India) in an all-stock deal. In February 2019, Reliance Communications filed for bankruptcy as it was unable to sell assets to repay its debts.