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Telecom
July 2018 www.intellinews.com I Page 23
Court rulings on Ukrtelecom nationalisation overturned by supreme court
Ukraine’s Supreme Court satisfied an appeal by Ukrtelecom’s owner ESU, which is linked to Sys- tem Capital Management (SCM), and overturned an appellate court’s ruling cancelling an agree- ment to privatise 92.8% of the shares in Ukrtele- com, Interfax-Ukraine reported.
Ukrtelecom is wrapped up in several battles at once, with Ukraine’s richest man Rinat Akhmetov, the owner of SCM, standing behind all of them.
The Supreme Court ordered the case to be re- turned to a first-tier court for review, Interfax said.
Ukraine’s State Property Fund (SPF) initi-
ated litigation last year aiming to cancel a 2011 agreement under which it sold a 92.8% stake in Ukrtelecom to ESU for UAH10.6bn ($414mn).
In December, the Kyiv Appellate Economic Court confirmed the nationalisation of the company by the state. The court rejected an appeal filed by the owner of Ukrtelecom against the lower court’s ruling that cancelled the sales-purchase agree-
ment of the firm. In addition, the court ruled that Ukrtelecom's key shareholder SCM pay $81.9mn in fines.
The reason for the cancellation was non-fulfil- ment by SCM of a $450mn investment pledge as part of the privatisation deal that was supposed to be made during the five years after privatisation.
“This is a really unexpected development that sig- nificantly reduces the SPF's chances to recover its control over Ukrtelecom. For SCM, this is just the beginning of the battle for the contested stake in Ukrtelecom, which had been pledged under a loan from Oschadbank (OSCHAD),” Alexander Para- schiy of Concorde Capital said in a note.
“Recall, just a month ago, the Kyiv Economic Ap- pellate Court rejected Oschadbank’s foreclosure claim on the pledged shares, referring to its Oc- tober ruling that the shares should be returned to the SPF. Now the bank has the chance to seize the collateral. In any case, this ruling merely extends this contest for many months, if not years.”
Russia's mobile major MTS approved $0.5bn buyback amid Sistema sanctions rumours
Shareholders of Russian MobileTelesystems (MTS) at the annual meeting approved a buyback of mobile major's shares worth RUB30bn ($0.5bn) over the next two years. The timing and the distri- bution of the buyback tranches will be announced separately.
"The news is supportive for the stock, and makes the name stand out again in terms of the cash return to shareholders," VTB Capital commented. Aton Equity also believes that the news is positive for MTS and should provide short-term support for the share price performance.