Bloomberg News

Sistema Registers $3 Billion Debt Plan Before Svyazinvest Sale

January 10, 2007

AFK Sistema, a Russian financial- industrial group, has registered a program to borrow as much as $3 billion after its fixed-line phone unit bought a quarter of national phone company OAO Svyazinvest amid government plans to sell the rest.

Sistema Capital SA, the holding company's financial arm, on Dec. 19 registered a 30-year program of medium-term notes with Britain's Financial Services Authority, Moscow-based Sistema's head of investor relations Victor Kurilo said today. He said earlier there were no immediate drawdown plans.

Sistema's OAO Comstar United Telesystems on Dec. 12 said it paid $1.3 billion to buy 25 percent of Svyazinvest, which has 34 million subscribers spread across 11 time zones. Comstar, which raised more than $1 billion in its initial public offering last February, has said it's interested in acquiring the 75 percent stake in Svyazinvest that the government has been planning to sell for a decade.

Sistema owns more than 50 percent of OAO Mobile TeleSystems, eastern Europe's largest cellular operator. It also controls OAO Sitronics, its technology arm; the Moscow Bank for Reconstruction and Development; the Detsky Mir chain of toy stores; and Rosno, a Russian insurance company that is partly owned by Allianz AG, Europe's largest insurer. Russian billionaire Vladimir Yevtushenkov controls Sistema.

To contact the reporter on this story: Lyubov Pronina in Moscow at lpronina@bloomberg.net.

To contact the editor responsible for this story: Lars Klemming at lklemming@bloomberg.net


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