Russian Agency stake to be bought back by company after 5 years - undisclosed terms of the agreement : Vedimosti

http://www.vedomosti.ru/newspaper/article.shtml?2009/12/08/220816

A rough translation follows :

State credit for “System” At Indian “daughter” АФК “System” is

Sistema Shyam Teleservices Ltd. (SSTL) difficulties with attraction

of financial resources. Sale of 19,8% of the shares Rosimusjestvu

will solve problem, but instead of АФК it is necessary in five

years to repurchase State share, adding to price of sale of 5-9% of

annual

The day after tomorrow stockholders SSTL will make decision about

increase of the company capital (meeting summons see on

www.vedomosti.ru). Now the operator acts just in eight from 22

areas, and for creation of panIndian network which SSTL promised to

launch by October 2010, “significant means" are necessary , is said

in summons. Earlier the топ-managers of the АФК “System” evaluated

them in $4-7 billion. Banks do not want to credit SSTL, referring

to insufficiency of her own capital, is said in the document: debt

SSTL is 22,58 bn rupees (about $490 million), and losses

accumulated on (the end of fiscal year) March 31 2009 are 12,12 bn

rupees (about $260 million), so, that pure assets SSTL decrease.

The company needs urgent injection of the capital, is noted in

summons, and in reasonable term it can be made only the way of

private placement of shares.

Stockholders have to approve placement of additional shares SSTL:

equity company capital will be increased by 36,3%, following which

19,8% of increased capital will be sold Rosimusjestvu to 49,31

rupee for share ($1,07), and 6,8% - three Indian stockholders SSTL:

Intell Invofin India (will repurchase 3,4%), A. T. Invofin India

and Cellphone Credit Securities India (on 1,7%). And Indians will

be able to repurchase new shares face value - 10 rupees for paper

($0,22), i.e. almost впятеро cheaper, than Russian state.

Independent auditor Vishnoy Manoj Associates evaluated a fair cost

of the share SSTL even below - only to 6,38 rupees on October 27

($0,14), is said in the document. Evaluation based on the last

аудированной records SSTL and, as a matter of fact, balance cost of

shares reflecting, explains it the chief of the АФК press-service

Julia Belous. She does not reflect a fair market cost of the share

, assures Belous.

The day after tomorrow stockholders SSTL will make decision about

increase of the company capital (meeting summons see on

www.vedomosti.ru). Now the operator acts just in eight from 22

areas, and for creation of panIndian network which SSTL promised to

launch by October 2010, “significant means" are necessary , is said

in summons. Earlier the топ-managers of the АФК “System” evaluated

them in $4-7 billion. Banks do not want to credit SSTL, referring

to insufficiency of her own capital, is said in the document: debt

SSTL is 22,58 bn rupees (about $490 million), and losses

accumulated on (the end of fiscal year) March 31 2009 are 12,12 bn

rupees (about $260 million), so, that Correspondent of “Sheets” was

acquainted with technique used by the auditor, and made sure that

she is based on balance companies ratings and does not use

prognosis sizes.

It is planned that the state, purchasing shares SSTL, will complete

simultaneously with “System” agreement, on the conditions of which

АФК in five years after transaction it is obliged to repurchase a

share of the state in SSTL either at the market price (in dollars),

or at the price of transaction, paying commission for use of means

not below bank, source, close to the participants of prepared

agreement says. Return ransom at the price of not below price of

purchase is confirmed plus determined per cent - mandatory

condition of transaction, by the employee of one of Russian

departments. It is a question of commission within the range of 5-

9% of annual in dollars, the топ-manager of large

telecommunications company heard. It confirms other source, close

to one of the parties of prepared agreement. That is why price of

purchase of shares SSTL for state will be higher, than for Indian

stockholders: Росимущество as opposed to миноритариев can transform

investment on credit, explains this interlocutor of “Sheets”.

Белоус did not start to make comments on the details of possible

agreement with state, as well representative Rosimusjestva acted.