Russian telco Comstar United TeleSystems has got board approval to sell its 25%+1 share stake in state-owned fixed line telecoms firm Svyazinvest to Rostelecom for RUB26 billion (USD835.83 million). Under the terms of the deal Rostelecom will buy the common shares of Svyazinvest, which accounts for the 17.31% of its equity, for RUB18 billion, while MGTS Finance, controlled by Comstar, will sell its 7.69% stake for RUB8 billion. Svyazinvest owns a 23.33% stake in MGTS and is currently the largest shareholder of Rostelecom with 50.7% of its ordinary shares. Comstar has said that it will use the proceeds of the transactions to repay its outstanding debt of RUB26 billion to Sberbank.
In a separate press release, Comstar and Mobile TeleSystems (MTS) announced that their boards had approved and recommended a merger. MTS currently owns nearly 62% of Comstar and consolidates Comstar in its financial results. The companies said that the merger will result in Comstar being subsumed into MTS and thereby will cease to exist as a separate legal entity. The companies expect to complete the merger transaction in the second quarter of 2011.