OREANDA-NEWS. November 15, 2010.  “COMSTAR – United TeleSystems” JSC (“Comstar”) (LSE: CMST), the largest integrated telecommunications provider in Moscow and 83 Russian cities, with a presence in Ukraine and Armenia, today announces that its majority owned subsidiary PJSC Moscow City Telephone Network (“MGTS”), received a mandatory tender offer from CJSC Sistema-Inventure on November 11, 2010, to acquire 1,625,691 ordinary shares in MGTS, or 2.04% of MGTS ordinary shares, at a price of RUB 436.20 per share.

Holders of MGTS ordinary shares will have 70 days to accept or decline the offer, which will be open until the end of January 20, 2011.

MGTS’ Board of Directors will review the mandatory tender offer at the meeting of the Board of Directors on November 16, 2010, in order to decide upon a recommendation. The tender offer and the recommendation of MGTS’ Board of Directors will be published in the media, and will be sent to holders of MGTS ordinary shares as per the legal requirements of the Russian Federation.

Following the completion of the reorganization of JSFC Sistema’s telecommunications assets in October 2010, Sistema-Inventure acquired 28% of the ordinary shares in MGTS, and the Sistema group of companies’ combined shareholding in MGTS is 97.96% of ordinary shares and therefore exceeds 75% of MGTS ordinary shares. In accordance with Russian legislation, Sistema-Inventure as the last buyer of MGTS shares is obliged to make a mandatory tender offer to holders of MGTS ordinary shares to acquire the remaining shares. Comstar increased its shareholding in MGTS to 69.96% ordinary shares in December 2009.