MTS settles dispute over Kyrgyz mobile operator

26 Jun 2013

Mobile TeleSystems (MTS) has announced that an agreement has been reached with Altimo, the telecoms arm of Russian conglomerate Alfa Group, Nomihold Securities and other associated parties to settle all legal disputes regarding Bitel, a former mobile operator in Kyrgyzstan. The agreement covers matters involving a number of parties and legal proceedings, including those in the Isle of Man, London, Luxembourg and the Seychelles. Pursuant to the agreement, all proceedings between the parties have been discontinued and waived, and MTS shall receive a total payment of up to USD150 million, which includes the USD125 million it had already received during proceedings. In 2005 MTS, Russia’s largest mobile operator by subscribers, purchased a 51% stake in Bitel for USD150 million from Nomihold Securities, which also sold MTS a put option to buy the remaining 49% of the company for USD170 million. Shortly after the purchase, MTS said that Bitel was seized by Kyrgyz authorities and it was never able to take control of the company. As such, MTS wrote off the investment in 2007 after it failed to gain operational control of Bitel. Bitel’s assets were then sold to Sky Mobile, a unit of Vimpelcom, in which Altimo is the largest shareholder.