Russian internet and TV services provider Comstar UTS plans to pay down debts once it has wrapped up the sale of its stake in state-owned fixed-line telecoms holding company Svyazinvest.
Comstar, a majority-owned subsidiary of the country’s largest…
Russian internet and TV services provider Comstar UTS plans to pay down debts once it has wrapped up the sale of its stake in state-owned fixed-line telecoms holding company Svyazinvest.
Comstar, a majority-owned subsidiary of the country’s largest mobile operator MTS, has received an agreement from long-distance operator Rostelcom to buy its 25% plus one share stake in Svyazinvest for Rbs26bn (US$836m).
Comstar has now explained that it plans to use the entire proceeds of the sale to pay down its outstanding loan to Sberbank that was used to buy the stake.
One of the conditions of the transaction is an exchange transaction by Sistema and Svyazinvest, whereby after completion Svyazinvest will control 100% of the share capital in SkyLink and Sistema will acquire the 23.33% stake in OAO Moscow City Telephone Network (MGTS). Comstar has a 69.93% stake in MGTS. Svyazinvest owns a 23.33% stake in MGTS and a 38% stake in Rostelecom (50.67% of the voting shares). 17.31% is owned by Comstar directly with another 7.69% owned by MGTS Finance S.A., which is controlled by Comstar.
The Russian government is backing the reorganisation of Svyazinvest, which will see the telecoms holding company’s regional subsidiaries merged into Rostelecom. Svyazinvest holds 51% of Rostelecom and its regional operators are Central Telecommunication Company, North-West Telecom, VolgaTelecom, Southern Telecom Company, Uralsvyazinform, Sibirtelecom and Dalsvyaz.
The Federal Property Agency holds 75% minus one share in Svyazinvest.
