25 Oct 2011 15:16

Rostelecom board to review buyback on Oct 31

MOSCOW. Oct 25 (Interfax) - The board of directors at OJSC Rostelecom plans to review a buyback of the company's own shares from the market on October 31, the telecom said in a statement.

Rostelecom earlier did not rule out the possibility of considering this issue.

"Our shares have fallen in comparison with September's results and this means that the company might have the potential opportunity [for a share buyback] but I won't comment on any options," Rostelecom president Alexander Provotorov said in mid-October.

He did not specify the size of the share packet that could be bought back.

Rostelecom shares increased by over 3% on Tuesday on news that the board would look into the buyback on October 31.

By 2:11 pm Moscow time, common shares in Rostelecom on the MICEX had increased in value by 3.1% to 151.86 rubles each while the company's prefs had slipped by 0.1% to 92.1 rubles.

And by 3:05 pm, Rostelecom common shares had gained 7.1% to 157.7 rubles, their highest point since September 22; company prefs were up 0.6% at 92.74 rubles.

The main shareholder in the unified Rostelecom is state holding Svyazinvest, which owns 40.0687% of the telecom's charter capital and 43.37% of its common shares. State corporation Vnesheconombank owns 2.26% of Rostelecom's charter and 2.45% of its voting shares. In addition, VEB manages the Deposit Insurance Agency's (DIA) stake in telecom, which comes to 6.86% (7.43% of voting shares).

Gazprombank is the third biggest shareholder in Rostelecom. The bank held 7.83% in the telecom as of August 19 (8.4% of common shares). It was earlier reported that Gazprombank is working in the interests of the Marshall Capital fund, which was created by Konstantin Malofeyev.

Gazprombank acquired shares in interregional telecoms for the future Rostelecom's option program. The operator of the program is Gazprombank-Telecommunications closed-end investment fund, which was founded by CJSC Gazprom Asset Management. Interregional telecoms have injected 2.088 billion rubles into the fund, for which share purchases were made.

As of June 30, 2011, 88,940,353 common shares in Rostelecom (2.8% of charter capital, 3.02% of common shares) had been reserved for the program.

Another leading minority shareholder in Rostelecom is the former general director of Svyazinvest, Yevgeny Yurchenko, who controversially left the state holding in autumn of last year. Yurchenko voted with an 8.5% common share packet in Rostelecom at its annual meeting on June 27. However, an accurate tabulation of his stake is considered impossible since the bulk of Yurchenko's shares have been put up as guarantees for REPO transactions in various banks.

CJSC Mobitel, which is owned by Rostelecom, holds 3.44% of the charter capital (2.69% of common shares) in its parent company. These shares were purchased from shareholders who did not support Rostelecom's reorganization. A portion of Mobitel's packet, 39,554,794 preferred shares in Rostelecom (16.3% of prefs, 1.2% of charter capital), has been included in the parent company's expanded option program.

Rostelecom's charter capital comes to 7.965 million rubles divided into 2,943,258,269 common shares and 242,831,469 preferred shares at a face value of 0.0025 rubles each.