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Russia's MTS Could Return to Uzbek Market Following Earlier Bankruptcy

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Russia's MTS could be about to make a return to the Uzbekistan market, just a couple of years after it wrote off most of its USD1.1 billion investment in the country.

Vladimir Evtushenkov, who controls AFK Sistema, which in turn owns 51% of MTS said that the mobile network "may return as soon as this year,"

Most terms for return have already been agreed with Uzbekistan, excluding one which is material for MTS, Evtushenkov said. He declined to elaborate, except to say that the talks are continuing.

Back in 2012., Uzdunrobita, MTS's wholly owned subsidiary in Uzbekistan, was declared bankrupt by the government in an action that is still being contested by MTS.

Late last year, Uzbekistan's state owned Uzbektelecom acquired the mobile network assets after several attempts to sell them in an open auction failed to secure a single bidder -- presumably put off by the capricious behaviour of the government in bankrupting the company.

MTS also has a claim pending against the government at the International Center for Settlement of Investment Disputes (ICSID).

Any deal to see MTS return to the country would presumably see the outstanding legal actions resolved, and it is suggested that the government would take a stake in the new company, which should ensure political stability.

In related news, MTS has also confirmed that USA based regulators have asked for documents relating to the 2012 bankruptcy proceedings.

On the web: Bloomberg

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Tags: mts  uzdunrobita  Uzbekistan