Capital funds buy over 1% of RosTelecom voting shares ahead of reorganization
MOSCOW. March 9 (Interfax) - Capital Group investment funds have bought into OJSC RosTelecom with the purchase of more than 1% of shares ahead of RosTelecom's asset consolidation.
Capital funds acquired 1,467,609 RosTelecom ADR in Q4, Bank of New York Mellon materials say. That corresponds to 1.2% of voting shares and 0.9% of share capital (1 ADR is equivalent to 6 shares) in RosTelecom.
Emerging Markets Growth Fund, part of Capital International Inc., holds 741,900 ADR. Capital International now has 1.272 million of the ADR. Capital International acquired 117,409 subscriptions, Capital Guardian Trust Co. 78,200.
The combined market value of the RosTelecom shares Capital holds on the U.S. non-exchange market (the company recently went listed on the NYSE, lowering its ADR program from II to I) is $43.06 million.
This large ADR purchase allowed Capital to become RosTelecom's largest portfolio investor, whose aggregate free-float is estimated by analysts at not over 5%. Second place is held by Van Eck Global, with a 0.32% voting-share stake. All told, fifteen major institutional investors in RosTelecom hold 2.73% of its common shares in the form of ADR.
RosTelecom, a major Svyazinvest subsidiary, faces the absorption in 2010-2011 of seven of the holding's inter-regional companies and OJSC Dagzvyazinform. After valuation of the consolidated assets, a conversion ratio and price for purchasing shares from minority holders who oppose the exchange are to be determined.
Expectations are that the conversion ratio will be announced this month. A shareholders meeting to address reorganization issues is set for mid-year.
Svyazinvest's inter-regional companies face reorganization by means of merger with the state holding's major subsidiary RosTelecom. An evaluation of consolidated assets will be used to calculate a conversion ratio and determine a share-purchase price for minority shareholders that disagree with the exchange.
Expectations are that the conversion ratio will be announced in March. A shareholders meeting to address reorganization issues is slated for mid-year. A reorganization decision should pass by a three-quarters majority, including holders of preferred shares - Svyazinvest's stake in the inter-regionals, including prefs, is 38%.