Daily analyst comments

Uralsvyazinform wins case on back tax claims


	Uralsvyazinform

Capitalization: 1 397 526 827,84 $

Common shares
Price	0,036 $

Price changing
week	month	year
0,7%	8,3%	70,8%

Preferred shares
Price	0,031 $

Price changing
week	month	year
0,2%	7,4%	87,5%

03.06.08 10:07

Sector: Telecommunications, IT

We are neutral about the positive news that the Uralsvyazinform company has won a court case. The fact is; back tax claims against inter-regional phone companies have become common, and should the operator lose the case, the amount of back taxes due would be insignificant.

Uralsvyazinform officially said on June 2 that it had successfully challenged back tax claims of RUB 556.7 mn (USD 23.6 mn) for 2003-2004 in the Moscow Court of Appeals No. 9.

Although the company would not disclose the claims in detail, we believe that they are related to traffic transit. Claims of this kind against inter-regional telecom companies have become common lately. Practically all of Svyazinvest's subsidiaries have been hit with back tax claims in recent years. In particular, back tax claims were recently put forward against Sibirtelecom (see our daily of November 23, 2007). Tax authorities have lost most of those cases.

Given that the news was expected in advance, we stick to our estimate of the fair value of Uralsvyazinform at USD 0.064 per common share and USD 0.040 per preferred share and assign BUY recommendations on both types of shares.

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