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. Last Updated: 07/27/2016

AT&T, US West Weighing Bids for Stake in Svyazinvest

Top representatives of AT&T and US West said Wednesday they were both open to possible bidding for a stake in Russia's Svyazinvest telecommunications holding company in September.


Alan Gibbs, president of AT&T Corp.'s AT&T CIS Ltd., said he had only just learned of the Russian government's plans to fix a September tender date for a Svyazinvest stake, but that in principle AT&T was interested.


"If it's coming out in September we would take a look at it. I don't want to create expectations, but we would take a look at it," he said.


Jeffrey Donahue, chief financial officer of US West affiliate Telecommunications Development Corp. Inc., said US West, Deutsche Telekom and France Telecom as a consortium were negotiating among themselves on a possible bid.


"It depends on the timing and structuring of the deal, if it can avoid the reasons it fell apart in the first place," he said, referring to a failed deal by Italy's state-controlled Stet SpA.


Stet won an auction and investment tender for 25 percent of Svyazinvest last year, but the deal fell through. Stet had agreed to pay $1.3 billion in cash and investment, but refused to pay an initial deposit before Svyazinvest's local telecom companies were registered.


The State Property Committee, Russia's privatization agency, said Wednesday that unspecified structural changes in the Svyazinvest deal could increase the value of a 25 percent stake by 2 trillion to 3 trillion rubles ($400 million to $600 million).


"But such changes are being delayed by the Communications Ministry, so that realizing the extra receipts is problematic," a committee press service statement said. The tender has been delayed in part by differences between the State Property Committee and Communications Ministry on how to sell Svyazinvest.


Russian First Deputy Prime Minister Vladimir Kadannikov announced the tender during talks with visiting Italian Foreign Minister Lamberto Dini on Tuesday and said Stet will be permitted to bid, a Kadannikov spokesman said.