UPDATE 1-Russia's VTB seeks co-investor for Tele2

Thu Jun 20, 2013 5:57am EDT

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ST PETERSBURG, Russia, June 20 (Reuters) - Russian state-controlled bank VTB said on Thursday it wanted to sell part of its stake in Tele2 Russia to help develop the country's fourth-largest mobile phone company, but would not consider Rostelecom as a partner.

Yuri Soloviev, first deputy president of VTB's management board, said the bank would keep control of Nordic telecom company Tele2's Russian business, which it bought in April for $3.55 billion.

That sale seemed to dash the hopes of predominantly fixed operator Rotelecom to buy the asset and expand its presence in Russia's fast growing mobile market, although some sources said VTB might have been acting as a middleman and would sell later.

"Our talks with a number of private investors are in quite an advanced stage. I believe we will sell a certain part of our stake within the next three-four months. It will be a co-investor, we will still control our investment," Soloviev told Reuters on the sidelines on the St Petersburg Economic Forum.

"We are not discussing the sale of any stake in Tele2 to Rostelecom ... It will be investors who can develop this asset with us in the future," he said.

Expectations of a merger between Tele2 Russia and Rostelecom increased last month when Alexander Provotorov, a former CEO of Rostelecom who had backed the idea of a merger between the pair, was appointed to run Tele2 Russia.

"Provotorov has extensive experience in the telecoms industry. He will be responsible for creating a general development strategy, for deals, including M&A," Soloviev said. (Reporting by Katya Golubkova and Oksana Kobzeva; Writing by Maria Kiselyova; editing by Elizabeth Piper)

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