National telecom merger may be suspended

© RIA Novosti . Ruslan Krivobok / Go to the photo bankRostelecom
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Reorganization of state-owned telecommunications holding Svyazinvest, in which the state plans to create a national telecoms company via merging Rostelecom long-distance carrier and regional telecoms firms, may be suspended, Kommersant business daily said on Wednesday.

Reorganization of state-owned telecommunications holding Svyazinvest, in which the state plans to create a national telecoms company via merging Rostelecom long-distance carrier and regional telecoms firms, may be suspended, Kommersant business daily said on Wednesday.

The paper said the Economic Development Ministry, at an October meeting with Deputy Prime Minister Sergei Ivanov, had proposed suspending the reorganization to calculate how many percent in the new company shareholders would have.

Minutes of the meeting, obtained by Kommersant, say the government should take into account the Economic Development Ministry's position, under which "it is reasonable to suspend all merger procedures" until other merger scenarios have been considered. The government should also approve a model for Svyazinvest and Rostelecom's reorganization.

Kommersant also said that the Telecommunications Ministry, Economic Development Ministry, Finance Ministry, national development bank Vnesheconombank and Deposit Insurance Agency are to work out a model under which the government will maintain control over Rostelecom after mergers with regional firms before November 30.

Vedomosti business daily said that the government, wary of losing control of the united telecoms company, had initiated a check of ratios to be used when swapping regional telecoms' preferred shares for ordinary shares in Rostelecom.

It quoted a Svyazinvest source as saying that the reorganization cannot be stopped because Rostelecom had already starting buying shares from regional telecoms shareholders dissenting with the mergers.

It quoted a Telecommunications Ministry spokesman as saying that suspending the reorganization was economically unreasonable and illegal as it was approved by majority of shareholders, while ratios calculated by Ernst & Young had been confirmed by Morgan Stanley.

MOSCOW, November 10 (RIA Novosti)

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