24 Dec 2009 10:31

MTS buys another 11.06% of Comstar, ups stake to 61.97%

MOSCOW. Dec 24 (Interfax) - Mobile TeleSystems (MTS) has acquired a further 11.06% of the shares in Comstar-UTS to increase its overall interest in the fixed-line provider to 61.97%, MTS said in a statement.

MTS said Comstar's stake in Moscow City Telephone Network (MGTS) rises to 69.93%.

MTS exchanged 31,816,462 treasury shares (1.6% of issues shares) and paid $8.3 million cash for 11.06% (46,232) Comstar shares owned by MGTS Finance.

MGTS Finance swapped shares in MTS and paid $7.3 million for 14.2% of MGTS (2,462,687 ordinary and 11,135,428 preferred shares), sold by NCH, a group of investment funds, which became the owner of 1.6% in MTS as a result of the deal, MTS spokeswoman Yelena Kokhanovskaya told Interfax.

"In line with Comstar's strategy to achieve more effective governance by building a larger stake in MGTS, its key asset, and to simplify the Group's ownership structure, this series of transactions has resulted in an increase in Comstar's stake in MGTS to 69.93%, and the cross ownership between MGTS group and Comstar-UTS has been reduced to 2.75%," said Sergey Pridantsev, President and Chief Executive Officer of Comstar-UTS.

MGTS no longer has any large minority shareholders in the run-up to an asset swap with the Svyazinvest holding, in which