OREANDA-NEWS. February 14, 2011. “COMSTAR – United TeleSystems” JSC (“Comstar” or “the Company” –  LSE: CMST), the largest integrated telecommunications provider in Moscow and 84 Russian cities, announces that the Company’s Board of Directors has today approved the share buyback related to the merger of Comstar into “Mobile TeleSystems” OJSC (“MTS” – NYSE: MBT), the leading telecommunications provider in Russia and the CIS, following receipt of approval at the Comstar Extraordinary General Meeting of shareholders (the “EGM”) held on December 23, 2010. Those shareholders that voted against or did not vote were eligible in accordance with Russian law to file for a buyback of their shares within a 45-day period from the date of the EGM. Submissions for a total of 35,264,875 Comstar shares (including shares underlying Global Depositary Receipts, “GDR”) representing 8.44% of the Company’s issued share capital were received.

The Company’s buyback limit of 10% of its net assets value  set under the Russian law has been oversubscribed by approximately 1.5685 times on the basis of applications received. As a result, Comstar will buy back its shares based on the pro rata ratio of 22,483,791/35,264,875, or approximately 0.6376 of a Comstar share for each Comstar share or GDR put. As was announced on June 25, 2010, the Company’s Board of Directors set the buyback price at RUB 212.85 per one Comstar ordinary share. GDR Holders that still hold GDRs following a pro-ration exercise will receive a separate communication regarding impact of the merger on their holding in the Company.

The deadline for submission of applications to participate in the buyback for eligible Comstar shareholders ended on February 7, 2011. Payment for the shares will be made no later than March 9, 2011.