OREANDA-NEWS. On 29 December 2008 was announced, that the Telecommunications Ministry is in the process of reorganizing Svyazinvest, and the most obvious scenario would be to converge the services of the state holding, head of ministry Igor Shegolev said. Whether or not this option gets the green light depends on the opinion of experts of the working group, which Shegolev is setting up by order of vice-premier Sergey Ivanov, and which is to consist of appointees from the relevant agencies and financial experts.

“It’s a shame that so few of them are left and that there is not way to unify them”, Shegolev lamented in response to a question by ComNews about the fate of Svyazinvest’s cellular assets, and added that the Telecommunications Ministry is working out options for the reorganization of the state holding.  “We will decide what to do with the company and it is working out its own strategy, and we are setting up a working group”, he announced at the final press conference on December 24.  The group will include appointees of the Telecommunications Ministry, Svyazinvest, the relevant agencies and also investment bankers.

“The overall trend on the telecommunications market is moving towards convergence, i.e. as many services as possible from a single window.  Therefore it’s clear that this is the direction our model will be moving in”, the telecom minister explained.  Incidentally, he went on to add, the decision depends on “what the experts and bankers have to say, since the model has to have investment appeal”.

In terms of investment attractiveness, before the crisis Svyazinvest lagged notably behind its competitors, Shegolev pointed out.  “According to the management of the company, there were reasons for this – the company is saddled with social tasks, which its competitors do not have to deal with.  On the whole, though, given the volumes of capital expenditure that have been made in the company, higher capitalization could have been expected”, the minister believes.  “Due to rumors about the possible restructuring of Svyazinvest the market has been factoring in risks about the dilution of shareholder value”.  However, reorganization would be useful as a single operating company would be more manageable than seven RTOs”, Uralalsib analyst Konstantin Belov explains.

“The main thing is that this option does not result in our stake being diluted”, stressed the director of AFK Sistema’s press service Yulii Belous (Sistema, through Komstar owns a blocking stake in Svyazinvest).  According to Belous, AFK forwarded a letter to Igor Shegolev with a request to include the president of Komstar OTS Sergey Pridantsev in the working group.  This letter reached the ministry, according to Elena Lashkina, press secretary of the Telecommunications Ministry.  She said that Sergey Ivanov had instructed Igor Shegolev to set up a working group attached to the governmental committee for transportation and telecommunications, and that “proposals are being prepared concerning the lineup of the working group”.

“According to our information, the group’s first meeting could be held in January 2009.  We’ll be playing an active role in the group, and all the group’s results will be announced after consolidated decisions are adopted”, says the press secretary of Komstar OTS.  However, Konstantin Belov notes skeptically: “The question is how quickly the state itself can make a decision, since if this process is drawn out for several years, the market situation could change”.

A working group has been set up at Svyazinvest itself to work out a strategy”, as Yuliana Sokolenko, a representative of the holding, points out. This group will include the management of the holding, consultants, representatives of AFK Sistema and KIT Finance.  So far the group has not come forward with any decisions, Sokolenko says: “Some proposals are being finalized, and then they will be discussed with the minority shareholder”.  As the current general director of Svyazinvest Alexander Kiselev said earlier, the proposals will likely be ready during the first quarter of 2009.