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Business news, 09.06.2010 18:01

Russia's Metrocom To Be Sold; Bids Open At RUB2 Billion

Russia's Metrocom To Be Sold; Bids Open At RUB2 Billion The local government in St. Petersburg and the son of the Russian city's governor are putting up for auction 100% of fixed-line-telephone operator Metrocom, with a proposed starting bid of 2 billion rubles, business daily Vedomosti reports Wednesday.

The asking price equals $62.9 million at Tuesday's exchange rate. It was agreed on by the government, which owns 55% of Metrocom's shares, and co-shareholder MST, which owns 45%. MST is a private company owned by Sergei Matviyenko, son of St. Petersburg Governor Valentina Matviyenko. MST representatives declined to comment Tuesday, Vedomosti says.

Metrocom, an "alternative" telecommunications company, mainly serves government and municipalities. Moscow-based fixed-line operator OAO Comstar United TeleSystems (CMST.RS) sold its 45% stake in Metrocom to MST in 2007.

Vice Governor Mikhail Oseyevsky, who is also the chairman of Metrocom's board, said the planned sale is part of the city administration's privatization program. Proceeds from the auction, planned for late July, will be used to pay down the city's budget deficit, he said.

Each bid above the RUB2 billion opening must be in increments of RUB20 million (about $629,000), said Andrei Stepanenko, director of the city's property fund.

Oseyevsky said several large companies have expressed interest in Metrocom, but he wouldn't identify them.

News source: FOXBusiness Com

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