5 Jul 2010 14:52

Rosimushchestvo cancels auction on 22% stake in Central Telegraph

MOSCOW. July 5 (Interfax) - Russian state property agency Rosimushchestvo has canceled the public auction on a 21.78% stake in Central Telegraph , Rosimushchestvo told Interfax.

The auction was canceled after it was decided to transfer the state stake in Central Telegraph to Svyazinvest, the state telecommunication holding.

The starting price for the stake was 902 million rubles with a bidding increment equal to 10 million rubles. The application deadline was July 6.

Communications Minister Igor Schyogolev had proposed transferring the state stakes in Central Telegraph, Bashinformsvyaz , MMTS-9 and Chukotkasvyazinform to Svyazinvest, and Prime Minister Vladimir Putin supported the measure.

Svyazinvest owns 38.25% of shares in Central Telegraph (51% of voting shares) and North-West Financial Company has 10.59%.

The stakes will be transferred to Svyazinvest in exchange for supplementary shares in the telecommunication holding.

Svyazinvest is currently undergoing a reorganization that will see its seven interregional operators and Dagsvyazinform merged into Rostelecom .

Central Telegraph will remain a Svyazinvest subsidiary. It will not be included in the reorganization due to difficulties valuing its property holdings.

The state stake in Central Telegraph was included in the government's forecast privatization plan in 2010. The state stake has regularly appeared on the privatization plan, starting with 2003, but because the disposition of the telecommunications assets is a constant source of debate, it has never actually come up for sale.

Central Telegraph provides fixed line, broadband Internet, documentary electronic communications and television using its own multi-service network. The company's biggest asset is its landmark building on Tverskaya Street in Moscow. The company had 3.5 billion rubles in revenue in 2008.