BEKASOVO, Moscow Region -- State-controlled telecoms giant Svyazinvest may hold an initial public offering on Western bourses once its reorganization is completed, its general director said Saturday.

"Yes, flotation of shares on Western stock exchanges is planned," Yevgeny Yurchenko told reporters on the sidelines of the annual general meeting of Svyazinvest-controlled former long-distance monopoly Rostelecom.

The government on Friday cleared the reorganization under the umbrella of Rostelecom, which is designed to increase the holding company's efficiency and reveal the fair value of its assets.

Deputy Prime Minister Sergei Ivanov on Friday called for an overhaul of the management and structure of the company because the current setup "impedes its effective development and weakens competitiveness," RIA-Novosti reported.

Yurchenko, who was appointed general director this year, also said Svyazinvest would be interested in buying fixed-line operator Comstar.

"Potentially yes, certainly, it would be interesting, but no offer has been made as of today," Yurchenko said.

Vedomosti reported last week that Svyazinvest was preparing to make an offer to Comstar shareholders, rivaling a potential bid by Mobile TeleSystems.

Yurchenko said the government was considering various options for a merger between Rostelecom and regional operators, including some that did not necessarily foresee early debt repayment by Svyazinvest subsidiaries.

He said the final reorganization plan would be approved in the summer and that the IPO, if held, would not take place on the New York Stock Exchange.

(Reuters, Bloomberg)