Moody’s: Arrest of MTS’ shares may hit Sistema’s solvency, not MTS’

MOSCOW, Jun 29 (PRIME) -- The arrest of 31.76% of shares of Russian mobile operator MTS, owned by multi-industry holding Sistema under a multi-billion lawsuit by oil major Rosneft, may affect credit solvency of the holding, but not of MTS’ one, international rating agency Moody’s said late on Wednesday in a statement.

The agency sees a corporate rating for the MTS group at Âà1 with a stable outlook. The rating for Sistema was revoked on November 15, 2016.

MTS contributes half of Sistema’s revenue and the bulk of the money flow spent on dividend payments.

“The court’s decision is negative for Sistema, because it restricts Sistema’s rights over its biggest asset, MTS, and limits dividend income. The effect on MTS is neutral,” Moody’s Vice President Yulia Pribytkova said.

Rosneft and Bashneft filed a 170.6 billion ruble lawsuit against Bashneft’s former owner, Sistema. On Tuesday, the Arbitration Court of the republic of Bashkortostan seized 185 billion rubles worth of Sistema’s assets under the case.

Moody’s does not expect that any changes in the right of ownership or losses of the controlling shareholder will weaken MTS’ credit profile.

Sistema’s owns 48.94% of MTS’ charter capital.

(59.5415 rubles – U.S. $1)

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