OREANDA-NEWS. November 25, 2009. Sistema (the “Group”) (LSE: SSA), the largest diversified public financial corporation in Russia and the CIS, which invests in and is a major shareholder of companies operating in different industries, announced that it has signed a non-binding Memorandum of Understanding (“MOU”) with JSC Svyazinvest and Comstar-UTS, indirect subsidiary of Sistema, and initiated the negotiations process over the reorganisation of certain assets. The outcome of these negotiations may result in the disposal of Sistema’s stake in CJSC Sky Link, the sale of Comstar-UTS’s stake in JSC Svyazinvest, and the increase of Comstar-UTS’s ownership in JSC Moscow City Telephone Network (“MGTS”), reported the press-centre of Sistema

Comstar-UTS currently owns 25% +1 share of Svyazinvest and a 55.7% stake in MGTS, whilst Sistema holds a 50% stake in CJSC Sky Link. Svyazinvest owns a 23.3% stake in MGTS. According to the MOU, Sistema may potentially sell its stake in Sky Link, whilst Comstar-UTS may dispose of its stake in Svyazinvest and acquire Svyazinvest’s holding in MGTS. Furthermore, according to the MOU, all parties may restructure the outstanding debt in relation to these transactions.
 
The exact terms and conditions of these transactions are subject to further negotiations and will be determined in separate binding legal agreements between the above mentioned and other potentially interested parties. The completion of these transactions is subject to certain conditions, including receiving necessary approvals from the regulatory bodies and obtaining a valuation. No assurance can be given that any of the parties to this MOU will execute definitive agreements or that any of the contemplated transactions will occur.
 
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