OREANDA-NEWS. January 6, 2011. "COMSTAR - United TeleSystems" JSC ("Comstar") (LSE: CMST), the largest integrated telecommunications provider in Moscow and 84 Russian cities, with a presence in Ukraine and Armenia, announces the decisions made at the Extraordinary General Meeting of Shareholders ("EGM").

Shareholders approved the reorganization of Comstar through the statutory merger into Mobile TeleSystems OJSC ("MTS"), the leading telecommunications provider in Russia and the CIS, and the Accession agreement. Of those shareholders participating in the EGM, 99.14% of shareholders voted in favour of the statutory merger of Comstar into MTS.

As a result of the statutory merger, Comstar will cease to exist as a separate legal entity. The reorganisation is expected to be completed in the second quarter of 2011.

Eligible Comstar shareholders, who voted for the statutory merger, will receive 0.825 MTS ordinary shares for each Comstar ordinary share that they own (with one Comstar GDR representing one ordinary share).

Comstar shareholders, who voted against or did not vote on the statutory merger, have the right to sell their shares back to Comstar for cash (the "Put Right") at the repurchase price set by the Comstar's Board of Directors of RUB 212.85 per Comstar ordinary share (the "Put") on June 25, 2010. The information in relation to the statutory right of shareholders to sell their shares back to Comstar as well as terms and conditions was sent to Comstar shareholders. Comstar has extended the Put Right to Holders of Comstar GDRs ("GDR Holders") who voted against or did not vote on the statutory merger. Information regarding how GDR Holders can participate in the Put, including terms and conditions, is to be sent to GDR Holders on December 24, 2010.

MTS currently owns 70.97% of Comstar's issued share capital (or 73.33% excluding treasury shares) and includes Comstar financial results into its consolidated financial statements.