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Sistema Buys a Quarter of Svayzinvest
The largest deal ever on the Russian telecommunications market is taking place. Comstar-United Telesystems has reached an agreement with Access Industries on the purchase of 25 percent plus one share of the Svyazinvest holding company. This will give AFK Sistema an advantage in the privatization of the state Svyazinvest package or the restructuring of its assets.
Reuters reported yesterday that a deal for the sale of the assets of the Cypriote Mustcom Ltd., through which Access Industries owns 25 percent plus one share in Svyazinvest, was close to completion. That information has been confirmed by Kommersant with sources in both Access and Sistema. Sistema's interest in Svyazinvest was well know in recent years. Sistema needs Svyazinvest infrastructure for the development of unregulated communications such as WiFi and WiMax. Sistema president Alexander Goncharuk estimated the total value of Svyazinvest at a minimum of $4 billion. During the IPO of Comstar in February of this year, Sistema promised that it would participate in the privatization of Svyazinvest with a large deal with the money attracted then. The Comstar IPO brought in $1.6 billion.
OAO Svyazinvest's main assets are seven interregional landline communications companies and the long-distance provider Rostelekom. The holding serves 34.5 million subscribers and its revenues for the first nine months of the year were 158.2 billion rubles. The Federal Agency for Federal Property Management (Rosimushchestvo) owns 75 percent minus one share in it. The blocking package in the company has changed hands repeatedly. It was bought by Mustcom Ltd. in 1997, when the Cypriote company belonged to George Soros and Oneksimpbank, for $1.875 billion. Soros became the sole owner of the Cypriote company and sold it to Access in 2004. Access Industries is owned by Leonard Blavatnik, a co-owner of TNK-BP and SUAL Holding.
Sistema GDR rose by 1.92 percent on the London Stock Exchange yesterday after news of the deal became known, and Comstar stock rose by 1.16 percent. The reaction of the Russian MICEX was even less enthusiastic. “Sistema's purchase, from the point of view of investors, can be called risky,” commented Dresdner Bank analyst Yuly Matevosov.
www.commersant.com
All the Article in Russian as of Dec. 12, 2006
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