Russia’s Rostelecom will offer Rbs123.93 (US$3.75) per ordinary share and Rbs87.80 (US$2.65) per preferred share to buy out minority shareholders who oppose the planned merger of its mobile assets in a venture with Tele2 Russia.
The state-controlled…
Russia’s Rostelecom will offer Rbs123.93 (US$3.75) per ordinary share and Rbs87.80 (US$2.65) per preferred share to buy out minority shareholders who oppose the planned merger of its mobile assets in a venture with Tele2 Russia.
The state-controlled telco said in a statement that the share buyback price was set by independent appraiser EY (Ernst & Young).
Rostelecom shareholders will be asked to approve the company’s reorganisation plan in the form of spinning off its mobile assets into a new, wholly-owned subsidiary called RT-Mobile. The Moscow-based company said the reorganisation is aimed at optimising the management structure of its mobile assets.
The Rostelecom board approved key components of the company’s strategy through to 2018 at a meeting yesterday. The management team has been asked to submit the final strategy plan at the next board meeting.
Meanwhile, Rostelecom CEO Sergei Kalugin told reporters his company aims to strike a deal to merge its mobile assets with those of Tele2 Russia by year-end.
The combined business should be able to compete better with the nation’s ‘big three’ operators – MTS, MegaFon and VimpelCom – than either operator could on its own.
Russian media have reported that Rostelecom’s new strategic plan prescribes merging RT-Mobile with Tele2 Russia owner T2 Rus Holding.
T2 Rus Holding is jointly owned by the VTB banking group and Bank Rossiya, which businessman Yury Kovalchuk chairs and partly owns. According to the reports, Rostelecom will own 45% of the combined entity, while T2 Rus Holding will own 55%. However, the reports state Rostelecom might get the option to eventually buy out VTB.
Local paper Kommersant reported that the Russian government is concerned it will not have sufficient control over the joint venture. According to the report, Federal Property Management Agency head Olga Dergunova has called for the government to take greater control of the Rostelecom board.
Meanwhile, news agency Itar Tass reported that Rostelecom has put out five tenders for advisers for various components of the reorganisation. A Rostelecom spokesperson was not immediately available to comment on this report.
Yesterday, Rostelecom reported consolidated revenues of Rbs232.3bn for the first nine months of 2013 and OIBDA of Rbs87.1bn. Net debt stood at Rbs208.3bn, with a net debt/OIBDA ratio of 1.9x.
