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. Last Updated: 07/27/2016

MGTS Approves Minimal Dividend Payments

Shareholders in Moscow City Telephone Network have approved a board proposal not to pay 1998 dividends on MGTS common stock and to pay just 1 ruble (4 cents) per share on preferred shares, the company said Monday.

MGTS, which reported a 1998 loss of 1.855 billion rubles ($766 million) at Saturday's annual general meeting, presumably decided to make the minimal payout on preferred shares so as to avoid triggering their conversion into common shares, analysts said.

Konstantin Chernyshov, a telecom analyst at NIKoil, said the dividends were "symbolic" and would cost the company just a few hundred thousand rubles to pay.

Last year, MGTS paid 1997 dividends of 17.311 kopeks (28 cents at the exchange rate in mid-1998) on preferred shares and 2.885 kopeks (0.5 cents) on common stocks.

The company also said it would increase the face value of its common stock from 1 ruble to 1,000 rubles.

Several Russian companies have made similar changes f which have no effect on the actual share price f to their shares' face value in the wake of the ruble devaluation.

MGTS faces further difficulties in 1999, with tens of millions of dollars of debts maturing before year's end, analysts said.

The meeting also re-elected Vladimir Lagutin to the post of chief executive, and installed a new chairman of the board, Nail Ismailov, former head of the national telecom holding Svyazinvest.