OREANDA-NEWS. March 05, 2010. Center Telecom reported that Yevgeny Yurchenko, the director of Svyazinvest, is one of the company's largest minority shareholders, with a 7.41% stake of the company's ordinary shares. This as an increase from his previously-reported holding of 1.33%, although Svyazinvest told Kommersant that the increase was due to the return of shares that had been lent in repo rather than as the result of new purchases, reported the press-centre of OTKRITIE FC.

View: Previously, the market had believed that Yurchenko's holdings did not exceed 2% in any of Svyazinvest's subsidiaries. We view the larger stake as positive news ahead of the announcement of swap ratios. Having said that, we reiterate our view that Center Telecom shareholders will be diluted during the restructuring.

Valuation: Center Telecom trades on a 2010 EV/EBITDA of 3.7x. 

Action: We retain our HOLD rating and target price of USD0.70 for common shares, and we recommend taking profits in the event of share strengthening.