April 8, 2011 / 1:15 PM / 7 years ago

UPDATE 2-Belarus seeks to sell stake in MTS mobile phone JV

* Belarus plans sell-offs to raise cash

* Has valued the stake at $1 billion

* Failed to agree price with MTS

* MTS says remains interested but will not pay that much

(Adds analyst’s comment, background)

By Andrei Makhovsky and Anastasia Teterevleva

MINSK/MOSCOW, April 8 (Reuters) - Belarus intends to sell its 51 percent stake in its local mobile phone joint venture with MTS (MBT.N), Russia’s biggest mobile telecoms company, a Belarussian deputy prime minister told the state news agency.

MTS has said it is interested in buying out its partner in the venture, but talks foundered on price, which President Alexander Lukashenko has put at $1 billion.

The joint venture is the country’s biggest mobile network operator, with around 5 million subscribers out of a population of 10 million.

“We are still interested in developing our business in Belarus and buying the government’s stake in our joint venture, but at a reasonable price,” an MTS spokeswoman said.

“If Belarus’s government decided to put their own share up for sale with an initial price of $1 billion, we do not rule out we will simultaneously put our stake up for sale at the comparable price,” she said.

    Analysts say such a move is unlikely though.

    “I think they (MTS) are just trying to bargain for a lower price,” said RBS analyst Alex Kuznetsov.

    Lukashenko, said last month the country was ready to sell its stake for $1 billion. MTS vice president Oleg Raspopov said on Tuesday the talks were continuing. [ID:nLDE72H0CY] [ID:nLDE73416O]

    “These shares will go up for international tender. There was a proposal from the Russian company to buy a controlling stake. Negotiations were held but we could not agree on price,” Deputy Prime Minister Anatoly Kalinin was quoted by the BelTA news agency as saying.

    The move is in line with Belarus’s plans to sell off state property to help plug a trade deficit that has seriously depleted central bank reserves.

    The MTS joint venture stake is one of the three key assets Minsk could sell, along with fertilizer producer Belaruskali and Beltransgaz, the company that operates pipelines taking Russian gas to Europe, Kuznetsov said. (Writing by Richard Balmforth and Maria Kiselyova in Moscow; Editing by Greg Mahlich)

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