News
Russia-based telco sells 50% stake in UMS back to government.
MTS late last week sold its 50.01% stake in its Uzbekistan joint venture, Universal Mobile Systems (UMS), to the government, just two years after the business was established.
UMS was formed from the ashes of Russia-based MTS’s Uzdunrobita unit.
Uzdunrobita filed for bankruptcy in 2013 following a long-running dispute with the government, which suspended its operating licence and fined it US$600 million (€540.9 million), following accusations that Uzdunrobita owed US$669 million in back taxes and had breached various antimonopoly, consumer protection, and advertising regulations.
The parties settled the dispute in August 2014, agreeing to form the UMS joint venture. Assets, equipment and infrastructure previously owned by Uzdunrobita were transferred to the new company, which was issued with new 2G, 3G and 4G licences.
MTS owned 50.01% of the company, while the remaining 49.99% was held by the government.
"Due to a variety of business reasons and other circumstances, MTS decided to sell its stake in the joint venture UMS," said Andrei Smelkov, director of MTS’s foreign subsidiaries unit, in a brief statement on Friday.
It is worth noting that MTS, along with VimpelCom, was named last year in a corruption investigation into the Uzbekistan mobile market being carried out by U.S. authorities.
Financial terms of the transaction were not disclosed. MTS said the sale will wipe 3 billion roubles’ (€41.7 million) worth of assets off its balance sheet, which will be accounted for in the third quarter.
