The board of directors of Far East Telecom has accepted a proposal by MS Direkt to acquire the company’s NMT assets, which involves equity positions in three cellular companies: Cellular Communication of Birobijan (60%), Khabarovsk Cellular Telephone (30%) and Amur Cellular Telephone (19%).  

According to deputy chief executive officer of business development at Far East Telecom, Alexander Zheludkov, a valuation was made of the three stakes and they were found to be worth $500,000.  Alexander Zheludkov pointed out that Far Eastreceived two offers: one from Sky Link ($300,000) and the other from MS-Direkt, for $550,000.  The Board of Directors of the Company reviewed the offers and adopted a decision to terminate participation in its cellular operators running on the NMT-450 standard. 

According to Alexander Zheludkov, Far East Telecom’s participation in these companies was inefficient and had no future.  None of the operators has ever paid out dividends and Far Easthas only minor stakes in two of them: 30% in Khabarovsk Cellular Telephone and 19% in Amur Cellular Telephone.  He also pointed out that the deal has not yet been officially closed, as the parties still need to complete legal procedures and perform due diligence.  Far Eastis planning to sell off non-core assets which do not generate solid profit margins provided that they do not create competition among the operator’s market rivals.