AFK "Sistema" Is Negotiating On The Purchase Of "KH-Telecom" Company


Aug 21 2007

Yerevan, August 21 /Mediamax/. Russian AFK "Sistema" (MTS mobile
operator) is negotiating on the purchase of "KH-Telecom" Company
(VivaCell trademark) – the largest mobile operator in Armenia.

The Russian "Vedomosti" newspaper reported this today, referring to
the President of AFK "Sistema" Aleksandr Goncharuk. He stated that
the negotiations on the purchase of "KH-Telecom" continue, and it is
not clear when the deal may be concluded.

The newspaper also states that analysts assess "KH-Telecom" Company
to a sum of $600mln.

On July 12 of 2007, the General Director of VivaCell Ralph Yirikian
refuted the statements on the possible sale of the Company. He compared
VivaCell "to an 18-year-old young lady, who has many worshippers,
who want to tie their lives with hers". However, he noted, "the young
lady does not want to get married, but she wants to realize her plans".

On August 15 of 2007, commenting in an interview to Mediamax on the
statements, according to which the representatives of MTS arrived in
Yerevan to carry out the final assessment of the cost of VivaCell,
Spokeswoman of MTS Irina Osadchaya stated that "our stance remains
unchanged – we are interested in acquisitions in Armenia and we are
examining all the possibilities on this market".

MTS is the largest mobile operator in Russia as to its subscribers
and the volume of profit. It maintains 78,5mln subscribers in Russia
and other CIS states. 52,8% of its shares belong to AFK "Sistema",
about 40% is put on trade on the New York Stock Exchange in ADR.

Capitalization of MTC as of August 20 makes $23,3bln, the net profit
for 2006 – $1.08bln.