OREANDA-NEWS. February 17, 2010. The deadline for the exchange of assets belonging to Sistema and Svyazinvest, originally scheduled for completion by 15 February, has been postponed. According to an RBC Daily report on Tuesday, the deadline will reportedly be delayed until May. Under the terms of the deal, Sistema's Comstar would hand over a 25%+1 share of Svyazinvest and a 100% stake of the mobile operator Skylink. In return, Svyazinvest would give Sistema 23.3% of the Moscow fixed-line operator MGTS, while VEB would assume RUB26bln of Comstar's debt, reported the press-centre of OTKRITIE Financial Corporation.     

View: We remain confident that the deal will eventually take place, and it is in the interest of all parties to close the deal as soon as possible. Moreover, we expect the closing to occur much sooner than the May date mentioned in the press. The Svyazinvest stake needs to be under state control to facilitate the restructuring of Rostelecom and the regional telecoms. Meanwhile, Sistema needs to hand over Skylink as soon as possible, as the asset could lose some valuable licenses. 

Action: Comstar shares might react negatively, in which case we would recommend buying into weakness.