MTS CONCLUDED BARGAIN WITH VIVACELL

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“A lot of young men were courting Viva Cell but the girl in fact chose the Russian MTS company,” said the owner of K-Telecom Pierre Fattush on September 14. MTS bought 80 percent of the shares of VivaCell for 310 million euros and is going to buy the other 20 percent by 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. Reporters were 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.

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. 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.

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