OAO Mobile TeleSystems climbed to a nine-month high as investors increased bets Russia’s biggest mobile operator won’t have to buy controlling shareholder AFK Sistema’s Indian mobile-phone business.
MTS added 2.1 percent to 238.28 rubles by the close in Moscow, the highest price since Aug. 2 and a fifth day of gains. Russian markets reopened today after public holidays on April 30 and May 1.
Sistema -- which owns 30.79 percent of MTS according to data compiled by Bloomberg -- is contesting a decision made on Feb. 2 by the Supreme Court of India revoking 21 of the 22 licenses held by Shyam TeleServices Ltd., which sells mobile- phone services in India under the MTS brand. The company may sell the Indian unit, Evgeniy Chuikov, head of investor relations, said during an earnings conference call on April 26.
“Investors were concerned that Sistema may want MTS to merge with its Indian unit, so this news is creating positive sentiment,” Ksenia Arutyunova, an analyst at Rye MAN & Gor Securities in Moscow, said by phone.
Moscow-based MTS has a history of purchasing assets from Sistema.
The company acquired CJSC Sistema-Inventure, which owns 29 percent of the Moscow City Telephone Network, for 10.6 billion rubles ($342 million), according to a Dec. 1 statement on its website. As part of the deal, MTS agreed to repay 10.4 billion rubles of debt Sistema-Inventure owed to AFK Sistema.
“We’re not married to this asset whatever happens, this is not our position,” Chuikov said during the conference call on April 26.
Russian billionaire Vladimir Evtushenkov’s investment company reported a fourth-quarter net loss of $530 million on April 26, largely because of an impairment charge from the Shyam license cancellations.
Excluding unrepeated items, Sistema said it had net income of $261 million in the period compared with $90.7 million a year earlier. Revenue rose 15 percent to $8.4 billion from a year earlier, the Moscow-based company said in a statement.
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