Russian Mobile Phone Retailer Sold to Oligarch

Russian billionaire, Alexander Mamut has brought the country's largest mobile phone retailer - Euroset, which controls about a third of the local market as well as having outlets in the CIS countries. The retailer was raided by police on two separate investigations last month - one related to claims of fraud and the other an alleged kidnapping by an employee several years ago.

Russian mobile operator, MTS recently said that it was in talks to acquire the company, but was only seeking a minority stake in the firm.

The value of the transaction was not disclosed, although the company is thought to be valued at around US$1.5 billion, and has been trying to float on the local stock market for the past couple of years. The Kommersant business daily reports that Mamut will pay US$400 million cash and assume about US$850 million in debt. The debt mountain has been weighing down the company and rumours have swirled this year that the firm was in financial trouble, despite turnover of $3.6 billion last year.

The co-founders, Yevgeny Chichvarkin and Timur Artemyev both sold their holdings in the company - although they will remain on the board of directors. Euroset operates around 5,000 outlets in Russia, Belarus, Ukraine, Kazakhstan and Kyrgyzstan, Moldova and recently set up outlets in India.

Alexander Mamut, who was politically close to Boris Yeltsin but is now known as a Kremlin loyalist also owns the US based web-blog platform, LiveJournal, along with Polymetal, Russia's biggest silver producer.

Posted to the site on 22nd September 2008