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. Last Updated: 07/27/2016

Metromedia to Sell Its Stakes in Comstar and Kosmos-TV

U.S.-based Metromedia International Group said Wednesday it intends to trade some of its Russian assets, including stakes in Comstar and Kosmos-TV, to an obscure offshore company that bought $58.6 million worth of its bonds last year.

Under a preliminary agreement signed this week, British Virgin Islands-registered Adamant Advisory Group will get Metromedia's 50 percent stake in leading Moscow alternative telecoms provider Comstar, cable television operator Kosmos-TV and two radio stations -- Moscow's Radio 7 and St. Petersburg's Katyusha. In exchange, Metromedia will get the bonds, $3 million in interest owed on the bonds and $5 million in cash.

Metromedia's 71 percent stake in St. Petersburg alternative operator Peterstar is not part of the agreement.

The deal is expected to close within weeks, said Metromedia CEO Mark Hauf. "This is an opportunity that both parties found advantageous," he said. "This transaction relieves a significant amount of financial pressure that Metromedia faces."

It is unclear who is behind Adamant, but a source close to the deal said it is City Hall-connected holding company AFK Sistema, which already has a 50-percent stake in Comstar.

Sistema said Wednesday that it was too early to comment on its possible involvement in the transaction, but its main shareholder, Yevgeny Yevtushenkov, told Reuters earlier this year that the holding was close to acquiring Metromedia's Comstar and Peterstar stakes.

"The question is nearly solved. We will buy. We have a certain amount of their outstanding bonds," he said at the time.

Hauf said that he was not aware of any connection between Adamant and Sistema.