Hogan Lovells Advises A Subsidiary of Svyazinvest On Its Expansion to Tatarstan

Moscow, 3 June 2010 - Hogan Lovells has successfully advised VolgaTelecom, the Volga-based regional subsidiary of the leading Russian state telecommunications holding Svyazinvest, on a public offer ("Offer") to buy 100% of AIM listed Teleset Networks, the largest alternative communications player in the Tatarstan region of Russia, for USD133.5m.

On 27 May 2010 the shareholders of Teleset Networks accepted the offer for 98% of the share capital. The completion of the first stage occurred today. VolgaTelecom has received all necessary corporate approvals to make the Offer and the approval of FAS, the Russian antimonopoly regulator. This transaction in the best way fits in with the Russian government's strategy for restructuring the country's fixed-line telecommunications sector, combining its publicly traded regional operators into a single centrally managed business based on long-distance operator Rostelecom, the LSE listed subsidiary of Svyazinvest. VolgaTelecom intends to seek to de-list Teleset Networks from AIM and replace its board of directors.

Hogan Lovells' integrated team of Russian and English lawyers advised VolgaTelecom on the Offer and its implementation.

The Hogan Lovells team was led by Oxana Balayan, partner and Richard Cowie, counsel assisted by senior associate Marina Ries and associates Eugenia Ivanyuk, Ekaterina Stepanischeva and Bourn Collier, all based in Moscow. London-based partners Nigel Read and Nicola Evans advised on the AIM aspects of the transaction and were assisted by Ilona Ali, associate.

Oxana Balayan comments:

"We are delighted to have acted for VolgaTelecom as part of Svyazinvest Group on this important project which is the first major deal made by the new management of Svyazinvest and which proves its ability to  generate new opportunities to the development of the Svyazinvest Group on the Russian telecommunications market. VolgaTelecom is a new client for us and we are pleased to share our extensive legal knowledge of the industry. We look forward to developing what is proving to be a successful relationship with this client."

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