SMARTS owner could try to block sale

15 Jan 2008

The owners of Russian cellular operator SMARTS are reportedly considering a change to its legal status from closed joint-stock company (CJSC) to open joint-stock company (OJSC) in order to block a proposed buy-out offer from a minority shareholder. 97.045% of SMARTS’ shares were put up for sale late last year, but under Russian law existing shareholders in a CJSC firm must be given preference in any share sale. Minor shareholder Volga Telecom said it would be interested in acquiring the stake, but CNews claims that SMARTS CEO and majority owner Gennady Kiryushin is against the deal and has called an extraordinary board meeting for 22 February to discuss a change to OJSC status. This would clear the way for the shares to be sold to an outside company such as Vimpelcom, which is known to be interested in the stake, or offloaded via an initial public offer (IPO); Kiryushin is thought to favour this strategy as it will realise a higher price for his shares. Based in Samara, SMARTS provides digital cellular services in 16 Russian regions covering approximately 34 million people, according to TeleGeography’s GlobalComms database.

Russia, SMARTS Group, VolgaTelecom