WHY MTS THANKS ARMENIAN GOVERNMENT

Lragir.am
14-09-2007 18:07:53

We stated two months a lot of young men are courting Viva Cell but
the girl hasn’t made up her mind, said the owner of K-Telecom Pierre
Fattush on September 14, who stated that the girl in fact chose the
Russian MTS company. MTS bought 80 percent of the shares of VivaCell
for 310 million euros and is going to buy the other 20 percent until
2012 by an option agreement.

The owner of MTS Leonid Melamed says the CIS space is highly
important to them, and they appeared in Armenia in the framework
of this expansion. The reporters wanted to know how MTS bought the
company the leadership of which stated two months ago the company was
not for sale. The reporters were also interested why VivaCell and MTS
kept the deal in secret, why the company was sold to MTS and why the
company was sold for 310 million euros instead of the rumored 600-700
million dollars.

Now the former owner of VivaCell Pierre Fattush, CEO Ralf Yirikian
and the new owner of VivaCell Melamed tried to answer these questions
but in fact did not answer these questions. For instance, Melamed said
310 million euros is a good price, and was not bargained low. Pierre
Fattush and Ralf Yirikian tried to explain why they agreed to sell a
company which generated profit. It became known that Fattush Group
owned by Pierre Fattush, who used to be the owner of VivaCell, is
likely to make major investments in other spheres of the Armenian
economy. Ralf Yirikian said the 310 million euros will be invested in
an urban development program in Yerevan called Downtown which costs
one billion dollars. He explains the deal on VivaCell by the intention
to enhance the company’s capacity, which will become part of the MTS
system which operates in five CIS countries: Ukraine, Turkmenistan,
Uzbekistan, Armenia and Russia.

Pierre Fattush and Melamed refuted the information that the deal on
VivaCell was political and was protected by the Armenian government.

According to Leonid Melamed, they did not make any side arrangements
regarding their deal and did not assume commitments other than by
the contract. Ralf Yirikian and Pierre Fattush said the news about
the political motive of the sale of the company, as well as the news
that the real owners of VivaCell are high-ranking Armenian officials
who sold the company out of political interests, to please the Russian
government, are just rumors. Ralf Yirikian, Pierre Fattush and Leonid
Melamed said it was a business deal. However, in his address Leonid
Melamed thanked not only the former owners and managers of VivaCell
but also the Armenian government. The reporters asked Melamed why
he thanked the government as well if it was a business deal. He said
before buying VivaCell MTS had consulted the minister of communication
of Armenia regarding its intention who said if the owner agrees to
sell, the government of Armenia sees no problem. Melamed said it
is their principle to consult the corresponding government agency
on their plans to see if their business plan matches that country’s
national policy.

The reporters asked why MTS was chosen, whether there were no more
lucrative bids, or any bids from other companies. They said there
were lots of bids but declined to say from which companies.