MTS Board of Directors approved the purchase of JSC "Sistema-Invenchur"

MTS Board of Directors approved the purchase of subsidiaries, MTS 100% shares of JSC "Sistema-Invenchur", which owns 29% of the voting shares in OAO "Moscow City Telephone Network" (MGTS). In accordance with the terms of the transaction, subsidiaries of MTS acquired 100% shares of JSC "Sistema-Invenchur" in AFK "System" for 10.56 billion rubles. Following the transaction, MTS will own 99.1% of ordinary shares and 69.7% of preferred shares of MGTS, which is equivalent to 94.1% of the share capital of the company. It is the duty of JSC "Sistema-Invenchur" is 10.44 billion rubles, and is indebted to AFK "System." Board of Directors of MTS approved the transaction based on the recommendations of the Special Committee, composed of three independent directors, who studied procedural matters of the transaction. Citigroup Global Markets Limited, an independent financial advisor, provided the Special Committee opinion on the fairness of the transaction. Legal advisor to the Special Committee acted as the law firm Cleary, Gottlieb, Steen & Hamilton, which conducted due diligence of an asset. Tax and financial audits conducted by auditing company Ernst & Young. The deal must be approved by the Board of Directors of AFK "Sistema". MTS has received permission to deal from the Federal Antimonopoly Service of Russia (FAS). The transaction is expected before the end of 2011.