Sistema Shyam TeleServices (SSTL) that nationally operates its telecom services under the MTS brand

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on Thursday announced mobilizing a loan of Rs 1,280 crore through non-convertible debentures (NCDs).

SSTL is planning to utilise the proceeds to further scale up its telecom operations and repay existing loans.

Deutsche Bank was the lead banker to the issue. The eight-year debt is repayable by 2019. However, the company did not disclose the coupon rate for the bond issue and investors that subscribed to the issue.

Sergey Savchenko, chief financial officer of Sistema Shyam Teleservices, said: “It was quite challenging to raise such significant funds with such a long tenure in an uncertain regulatory environment in India, but business has to continue and grow.”

MTS in India has secured over 15 million wireless subscribers and under the MBlaze brand provides mobile broadband services to more than 1,200,000 customers in over 200 cities across the country.

The Rs 1,280 crore debt was raised after the company had in September 2011 mobilised Rs 920 crore from Barclays Bank and ICICI Bank. SSTL is a venture, involving equity participation by Sistema of Russia, the Russian Federation and Shyam Group of India. Sistema is the majority shareholder in the company.