AFK, RWS create major Russian prod'n outfit

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MOSCOW -- Russian conglomerate AFK Sistema on Thursday announced a $150 million joint venture with Russian World Studio that will create Russia's largest TV and film production company.

Sistema will own a 51% controlling stake, with the studio's management holding the remaining shares, the companies said in a joint statement.

Sistema first vp Anton Abugov said that the joint venture, which is expected to yield $200 million-$300 million in annual revenue, is part of the company's strategy of developing nonlisted businesses and take advantage of Russia's growing film and TV production market. Most of Sistema's revenue now comes from its listed telecom units MTS and Comstar.

The joint venture is named RWS and will retain the studio's senior management. The studio contributed all of its assets, including its full-service production facilities in Moscow and the Anapafilm Studio on the Russian Black Sea coast.

Abugov said at a press conference that Sistema contributed assets including Sistema's film studio in St. Petersburg, which is still under construction, and Thema Production, which has co-produced such high-profile international productions as "Goodbye, Bafana," "Rescue Dawn" and "I Want Candy."

RWS, created in 1998, is one of Russia's largest producers with its own production facilities. It is known for filming hit TV series including "Maroseika,12" and "Poor Anastasia" and providing production services to such international co-productions as "Leningrad," starring Gabriel Byrne and Mira Sorvino.

AFK Sistema, a joint stock financial corporation incorporated in 1993, is the largest and most diversified consumer services company in Russia and the CIS, with holdings in telecommunications, electronics, insurance, finance, real estate, retail and media.

Chairman Vladimir Yevtushenkov owns 62% of Sistema. The company reported audited revenue of $10.9 billion for 2006 and is traded on the London Stock Exchange as well as the RTS and MICEX exchanges in Moscow.
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