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MOSCOW, Jan 30 (Reuters) - Russian telecoms group Rostelecom is planning to sell a 12 percent stake to banking group VTB for up to 35 billion roubles ($995 million) to help to pay for a share buyback, business daily Kommersant reported on Thursday.
State-controlled Rostelecom is planning a share buyback from those shareholders who will not support a spin-off of its mobile assets into a joint venture with Tele2 Russia that VTB bought from Sweden's Tele2 last year.
The mobile spin-off aims to create a stronger rival to compete with Russia's big three wireless carriers - MTS MBT.N, Megafon MFON.MM and Vimpelcom VIP.O - which currently control more than 80 percent of the Russian mobile market.
The price of the stake sale to VTB will be based on the market price and the bank and the telecoms operator will enter into a forward contract allowing Rostelecom to buy back that stake in two or three years, Kommersant said.
Rostelecom owns about 17 percent of its ordinary shares accumulated during past buybacks and has repeatedly said it could sell them in a private placement to reduce debt. In December, the company said it was also considering a secondary public offering.
Rostelecom and VTB both declined to comment.
Shares in Rostelecom were flat by 0850 GMT, outperforming broader market index which was losing 0.7 percent. ($1 = 35.1719 Russian roubles) (Reporting by Anastasia Teterevleva and Oksana Kobzeva; Writing by Maria Kiselyova. Editing by Jane Merriman)