The Moscow city telephone network, known as MGTS, has announced plans to sell shares to the public under the current Russian privatisation law, Newsbytes reports, noting that it is the first time ever that a large communications company in the former Soviet Union has become a private entity. A conference of the company’s employees approved a plan to offer shares in the new company last month. The estimated share capital of MGTS, put at an arbirtrary $1,200m, is to be shared out four ways. Only 75% of the capital will bear votes; a 39% tranche of the shares, bearing votes, will be owned by the Federal Property Fund, the state holding company; 25% of the capital in non-voting shares will be distributed free to the 20,000 employees; 8.2% with votes will be sold to employees at a 30% discount to the issue price; 5% of shares with votes will be sold to MGTS management of 34 people for an immediate cash payment; and 22.8% of voting shares will be sold to the general public through auction sales or a tender offer. The shares will be issued with a 1000-ruble face value. Published reports on the plan noted that, by law, not less than 29% of the company’s shares must be made available to the public to make the privatisation legal. MGTS is said to have asked the State Property Fund to reconsider its shareholding to make the process completely legal. The Moscow telephone network owns 99% of telephone lines in the city.
