OREANDA-NEWS. August 14, 2009. The long awaited reorganization of the Svyazinvest regional operators is expected to get underway in September under Rostelecom, as consolidator, though the exact format remains to be decided. The government has been consolidating its stake in Rostelecom for some time and now controls 91% of the company, reported the press-centre of Investfunds.

We have constructed three scenarios by which Rostelecom could gain control of the regional operators in the lead up to for the restructuring of Svyazinvest. Under any of the scenarios considered, both Rostelecom’s common and preferred shares are undervalued.

There is concern in the investment community as to whether minorities in the regional operators would be disadvantaged by any restructuring. We argue no, and nor do we expect any disadvantages arising from the potential spinning out cellular assets.