Telecom operator Rostelecom has announced that Russian President Dmitry Medvedev signed a decree on 24 March directing a merger with telecoms holding unit Svyazinvest.
The government and national development bank Vnesheconombank will together hold…
Telecom operator Rostelecom has announced that Russian President Dmitry Medvedev signed a decree on 24 March directing a merger with telecoms holding unit Svyazinvest.
The government and national development bank Vnesheconombank will together hold more than 50% of the ordinary shares of the new company, which will operate under the Rostelecom brand name, according to a statement.
Rostelecom president Alexander Provotorov said the reorganisation is designed to simplify the company’s shareholder structure and eliminate cross ownership.
In the statement, Rostelecom said that, together with Svyazinvest, it will host extraordinary general meetings for each set of shareholders and notifications will be sent to their respective creditors.
“[T]he mandatory buyback of shares from shareholders that vote against the reorganisation, or do not participate in voting, will be executed for an amount not exceeding 10% of each company’s net asset value,” the statement added.
Rostelecom said it will then issue additional shares to replace the Federal Agency for State Property Management’s stake in Svyazinvest, and Svyazinvest shares will be converted into Rostelecom shares. Meanwhile, Svyazinvest’s 43.37% stake in Rostelecom is expected to be cancelled.
Rostelecom currently holds 25% plus one share in Svyazinvest.
In a conference call on the reorganisation, Provotorov said valuations of assets were expected to take place within weeks.
The deadline for all decisions is a year from now, he said, adding “we will do our best to complete everything within the timeframe”.
Provotrov said he was confident state board approvals would also take place within the year.
Svyazinvest first revealed its plans for the merger in February 2009, when it stated its intention to restructure the business with a view to becoming a national champion.
In April 2011, Rostelecom merged with eight regional telecoms operators – all former subsidiaries of Svyazinvest.
