Soros to sell 'worst investment of my life'
By Arkady Ostrovsky and Andrew Jack in Moscow and Charles Pretzlik in London
Published: March 16 2004 21:56 | Last Updated: March 16 2004 21:56
George Soros has agreed to sell his stake in Svyazinvest, the Russian state-controlled telecoms holding company, to a local investor, drawing a line under one of the Hungary-born investor's worst investments and triggering a shake-up in the sector.
The stake is believed to have been sold for between $600m and $700m to Access Industries, a company controlled by Len Blavatnik, a Russian investor who is also a shareholder in BP-TNK, the oil company.
The deal brings to a conclusion Mr Soros's involvement in what he once called the "worst investment of my life". He joined a group of investors who paid $1.8bn for a stake of 25 per cent plus one share in Svyazinvest in 1997.
Shareholders in Mustcom, a holding company two-thirds owned by Mr Soros, have yet to vote formally on the transaction, but it is almost certain to be approved, according to one Moscow-based banker.
The change of ownership paves the way for a privatisation of the state's 75 per cent holding in Svyazinvest, which holds controlling stakes in seven regional telecoms groups and has an interest in Rostelecom, a national long-distance carrier.
Analysts put the value of the stake at $800m, based on its underlying assets.
It is believed that Mr Blavatnik bought his 25 per cent stake as a long-term investment, with a view to increasing his holding at privatisation.
Alexei Yakovitsky, a telecoms analyst at United Financial Group in Moscow, said: "A deal like this would make no sense unless the buyer participated in the privatisation of the 75 per cent."
Mustcom held a minority blocking stake in Svyazinvest but had been unable to exert much influence over the past few years.
The deal values the whole of Svyazinvest at about $2.6bn, but analysts said the Russian government might demand a high premium when it sells the rest of the company, possibly this year. |
