Russian mobile phone operator MTS quits Uzbekistan

August 5, 2016 2:24 PM EDT

A logo of MTS mobile phone operator is seen on a building in central Moscow, Russia, March 10, 2016. REUTERS/Maxim Shemetov

Get access to the best calls on Wall Street with's Ratings Insider Elite. Get your Free Trial here.

MOSCOW (Reuters) - Russia's biggest mobile phone operator MTS has sold its 50 percent stake in Uzbekistan telecommunications operator Universal Mobile Systems (UMS) to its joint venture partner, it said on Friday.

MTS has been under scrutiny from the U.S. Department of Justice and the Securities and Exchange Commission as part of a broader investigation into telecom firms' operations in Uzbekistan.

"Due to a variety of business reasons and other circumstances, MTS decided to sell its stake in the joint venture UMS LLC," Andrei Smelkov, MTS vice president, said in a statement.

The company said in a separate emailed comment that its decision was not prompted by the U.S. investigation or by any business difficulties related to the Uzbek government.

It declined to disclose the price of the sale but said UMS had repaid all its debt obligations to MTS.

Russia's Interfax news agency first reported the deal on Thursday, and said it would be done at a "a symbolic price", citing a source in the Uzbek state communications committee.

MTS sold its UMS stake to the State Unitary Enterprise Centre of Radio Communication, which is part of Uzbekistan's Information Technologies Ministry, and already owns the other 50 percent of UMS.

Due to the stake sale, MTS expects to write off about 3 billion rubles ($46 million) of assets in the third quarter, it said.

Its statement was published after the Moscow stock market close. MTS' American Depositary Receipts (ADRs) were up 1.2 percent in New York by 1813 GMT.

($1 = 65.6455 rubles)

(Reporting by Anastasia Teterevleva; writing by Polina Devitt; editing by Susan Fenton)

Serious News for Serious Traders! Try Premium Free!

You May Also Be Interested In

Related Categories


Add Your Comment