* NTC worth $500 mln-bankers
* MTS, Vimpelcom seen as potential buyers
* KT shares extend gains, up 1.7 pct as market falls 0.2 pct (Adds source comments)
By Hyunjoo Jin
SEOUL, April 22 (Reuters) - KT Corp , South Korea's top fixed-line and No.2 mobile company, is in talks to sell its Russian unit, New Telephone Company (NTC), its chief executive said on Friday.
In November, sources familiar with the deal said KT had appointed Credit Suisse to sell an 80 percent stake in NTC it bought in 1997 and that the asset would be worth around $500 million.[ID:nLDE69L1OJ]
Vimpelcom , Russia's No.3 mobile phone operator, has previously said it would be interested to buy NTC.
Mobile TeleSystem (MTS) , Russia's top mobile company, said in February it had made a bid for KT's stake in the company. [ID:nLDE71D297]
NTC is Russia's tenth-largest mobile operator and is focused on the Primorsk region of eastern Russia. It had 1.3 million subscribers at the end of September 2010. [ID:nLDE71D297]
KT shares extended gains Friday, rising 1.73 percent in a wider market that was down 0.25 percent as of 0459 GMT.
"We are in talks to sell the business," KT's chief executive, Lee Suk-chae, told Reuters on Friday. Lee declined to comment on the potential buyer or the size of the deal.
South Korean carriers are trying to expand abroad to generate new revenue streams because the domestic market is nearing its saturation point.
"NTC saw its profit climbing, but the company has quite limited potential for growth as it is mainly focused on eastern Russia," said Park Jong-soo, an analyst at Hanhwa Securities.
"Korean telecom carriers have no track record of success overseas, but KT's Russian unit was an exception. It is a regret that KT does not further expand its overseas unit, but the deal is also positive as it would bring new cash," he said.
Recently, SK Telecom Co , South Korea's top mobile carrier, bid for Blockbuster Inc. , but dropped out when the U.S. movie rental chain rejected its offer as inadequate. [ID:nN05121931]
Last week, Vimpelcom closed a more than $6 billion cash-and-shares acquisition of 51 percent of emerging markets specialist Orascom and 100 percent of Wind of Italy in a deal that will see Vimpelcom take on $20 billion of debt and create the world's sixth-largest mobile provider. [ID:nLDE73E15T] (Additional reporting by Victoria Howley in London; Editing by Jonathan Hopfner and Matt Driskill)