OREANDA-NEWS. September 30, 2009. More details about Sistema's deal with the Russian government surfaced in a Kommersant article. The government is reportedly mulling the purchase of a 20% stake in Shyam Telelink for US680m. In 5 years that stake is to be sold back to Sistema for US680m plus 9% annual interest, reported the press-centre of OTKRITIE FC.  

View: We take the news positively as both parties would benefit from the structuring of a deal in the manner reported. Sistema would receive reasonable credit while the Russian government obtains money that is currently locked in India. Moreover, such a deal decreases the likelihood of Sistema returning the favor to the Government in another deal.

Valuation: Sistema trades at a 45% discount to the sum of the parts.

Action: We expect positive reaction in Sistema [NR] shares.