PRESS: Source Says Euroset to Buy out 7.5% Stake from UralSib

MOSCOW, Aug 28 (Prime-Tass) -- Russia?s largest mobile handset retailer Euroset plans to buy out a 7.53% stake from UralSib bank, a source close to the deal said, Kommersant business daily reported Monday.

The bank bought the 7.53% stake in the Netherlands' Euroset Holding in May for U.S. $50 million. Euroset Holding fully controls Russia's Euroset.

The source said that Euroset has already made the first payment for the stake to the bank totaling $10 million, while total payments would amount to $80 million to $85 million and would be completed in six to eight months, the daily reported.

No official comments were provided, the daily reported.

An investment bank representative said that such deals usually take place when a company wants to make an initial public offering (IPO). "A bank buys a minority stake in the company, carries out a legal probe of the deal and later acts as an underwriter during the IPO. As Euroset postponed its IPO to early 2008, UralSib made a decision to sell its stake back to the owner," the representative said, as quoted by the daily.

Euroset is indirectly controlled by its chairman Yevgeny Chichvarkin and a member of the company?s board of directors, Timur Artemyev.

Euroset said in a bond offering memorandum in May that it planned to make an IPO within three years depending on market conditions, the daily reported.

Chichvarkin said in April that Euroset hoped to make an IPO in late 2006 or early 2007.

Euroset had 3,861 outlets as of July 1. The company's revenue in 2005 amounted to U.S. $2.574 billion. Euroset operates in Russia, Belarus, Ukraine, Kazakhstan and Kyrgyzstan.

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Posted to the site on 28th August 2006