Rostelecom to address add'l issue for Svyazinvest merger
MOSCOW. July 23 (Interfax) - The board of directors at telecoms holding OJSC Rostelecom will on August 5 take up the issue of issuing additional stock for the merger with OJSC Svyazinvest and twenty of the operator's subsidiaries.
A Rostelecom statement says that the issue volume will be 1,582,234,000 ordinary shares with par value of 0.0025 of a ruble each.
That includes 1,428,670,000 additional Svyazinvest shares that will be converted. The conversion ratio has already been determined: 14.0547520661157 Svyazinvest shares will be converted into one ordinary Rostelecom share. As a result, all 20,079,598,884 ordinary Svyazinvest shares will be converted into Rostelecom stock.
Russia's federal state property fund Rosimuschestvo current owns 75% of Svyazinvest, Rostelecom the rest.
Besides Svyazinvest, 20 subsidiaries will be merged to Rostelecom: OJSC National Telecommunications, OJSC National Cable Networks, OJSC St. Petersburg Cable Television Company, CJSC Elcatel, OJSC National Cable Networks - Eurasia, CJSC Novosibirsk Antenna Cable Television Broadcasting, CJSC Teleset-Service, CJSC Eltelekor, OJSC Mosteleset, OJSC Mostelecom, CJSC Teleset, CJSC Teleset Invest, OJSC TNPKO, CJSC Simbirsk Telecommunications Systems, CJSC Svyazinvest, OJSC Russian Telecommunications Network, CJSC Novgorod Deitak, CJSC Parma-Inform, CJSC Enter and OJSC Ingushelektrosvyaz.
After the additional placement, Rostelecom's share capital will increase by half to 4,768,323,738 shares from the current 3,186,089,738 shares. However, after the merger Rostelecom will have to cancel treasury shares obtained in the conversion of 25%, or 357,167,500 ordinary shares.
The terms of the reorganization stipulate that Rostelecom stock belonging to Svyazinvest will be canceled - 42.23% of capital or 1,345,485,700 shares.
With the cancellation, Rostelecom capital will go down to 3,065,670,000 shares.
The decision to reorganize Rostelecom by joining Svyazinvest and the twenty subsidiaries was made by the operator's shareholders at a meeting in late June. The owners of 39.8% of the stock in Rostelecom either did not take part in the meeting or voted against the reorganization and now can have Rostelecom buy them out. The price is set at 136.05 rubles per ordinary and 95.24 rubles per preferred share. Among the stockholders that can sell their stock is the fund Marshall Capital, which has a roughly 10.7% voting share stake in security with Gazprombank . The size of the buy-out is limited to the amount of money that Rostelecom can by law put into it - not more than 10% of the value of net assets.
The reorganization is slated for completion this October 1.
Taking into account all changes to Rostelecom charter capital, the outcome will be the state and Vnesheconombank (VEB) holding more than 50% of the operator. In 2014-2016, the state intends to privatize that stake in its entirety.
Svyazinvest is Rostelecom's largest shareholder, with 45.72% of ordinary shares (42.23% of charter capital). The federal property agency Rosimushchestvo has 7.43% of ordinary shares (6.86%) and Vnesheconombank (VEB) has 2.45% (2.26%). Rostelecom subsidiary Mobitel owns 4.21% of ordinary shares and 12.55% of preferred shares (4.84% of capital).
All together, Svyazinvest, state structures and Mobitel hold 56.19% of Rostelecom's capital.
