Moscow, Russian Federation – Mobile TeleSystems OJSC (“MTS” or "the Company" – NYSE: MBT), the leading telecommunications provider in Russia and the CIS, announces that its subsidiary Moscow City Telephone Network OJSC (MGTS), through its wholly owned subsidiary MGTS-Real Estate CJSC, has concluded an agreement to sell a 51% stake in Business- Nedvizhimost CJSC to Sistema JSFC (LSE: SSA), the largest publicly traded diversified holding company in Russia and the CIS and the parent company of MTS, for a price of RUB 3.2 billion.
Business-Nedvizhimost CJSC was spun off from MGTS-Nedvizhimost in September 2013. Business-Nedvizhimost CJSC owns and manages 76 real estate sites and 44 real estate facilities throughout Moscow with a total area of roughly 178,000 sq m. Sites are mainly used by MGTS for housing of technical equipment, including switches, and will be freed up by the end of 2015 as MGTS completes its investments in its Gigabit-capable Passive Optical Network (GPON).
Andrey Ershov, CEO of MGTS, commented, “The roll-out of GPON not only brings MGTS’s customers broadband and value-added-services at the unrivalled speeds, but also enables MTS Group to realizes significant efficiencies, reduce administrative expenses and generate additional value through the management of the freed-up real estate. Given the technical purpose of the sites, the repurposing, modernization and management of this real estate portfolio requires substantial investments and expertise, which is not resident in the MTS Group. The sale of the real estate portfolio in its current ‘as-is’ condition mitigates the need for additional investments. Proceeds from the transaction will be used to find continuation of GPON project roll-out and capital expenditures at MGTS.”
Appraisal of the real estate portfolio was conducted by American Appraisal.
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For further information, please contact in Moscow:
Joshua B. Tulgan
Director, Corporate Finance & Investor Relations
Mobile TeleSystems OJSC
Tel: +7 495 223 2025