Bloomberg News

AFK Sistema to Decide on New Share Buyback ‘Soon,’ Shamolin Says

February 22, 2012

Feb. 22 (Bloomberg) -- AFK Sistema, billionaire Vladimir Evtushenkov’s holding company, will decide “soon” whether to hold a new share buyback, according to Chief Executive Officer Mikhail Shamolin.

“Last year the buyback was very successful, we earned about 30 percent,” Shamolin said in an interview in Moscow Feb. 17. “We are discussing the question of a new buyback. The discount is still quite large. We believe there shouldn’t be one and that it will decrease.”

Sistema completed a buyback of shares and global depositary receipts in November. The company purchased 376,000 receipts at $16.61 apiece and 8.75 million shares at 20.97 rubles each. Sistema’s stock may climb 20 percent by the end of the year if markets remain stable, said Shamolin, who took up his current post last March after stepping down as head of OAO Mobile TeleSystems, a Sistema unit. He declined to comment on whether the buyback would include MTS shares.

Sistema added 0.3 percent to 26.552 rubles as of 4:26 p.m. in Moscow. The GDRs slid 1.3 percent to $19.92. One depositary receipt is equal to 20 ordinary shares.

The shares and depositary receipts currently trade at a discount of 40 percent to 50 percent to their fair price, Shamolin said.

--With assistance from Alex Nicholson in Moscow. Editors: Alex Nicholson, Torrey Clark

To contact the reporter on this story: Ekaterina Shatalova in Moscow at eshatalova@bloomberg.net

To contact the editor responsible for this story: Hellmuth Tromm at htromm@bloomberg.net


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