Key Stages of the Reorganization
First stage
The reorganization started in May 2009 when the Government Commission on Transport and Communication headed by Deputy Prime Minister Sergei Ivanov approved the concept of state –owned assets restructuring by means of merger of regional operators on the basis of OJSC Rostelecom.
The reorganization was actually launched on October 20, 2009 when SvyazInvest Board of Directors approved the merger of Regional Telecommunication Companies (RTOs) and OJSC Dagsvyazinform with OJSC Rostelecom.
One of the main merger stages was obtaining of Corporate approvals. In summer 2010 during Annual General Meetings of RTOs and Rostelecom the shareholders voted for the merger with Rostelecom and approved applicable SWAP ratios.
SWAP ratios and buy-back prices for ordinary and preferred shares.
|
RTOs |
SWAP ratios (number of shares converted into one ordinary share of OJSC Rostelecom) Ordinary shares Preferred shares |
Buy-back Price for ordinary and preferred shares, RUR | |
|
OJSC Sibirtelecom |
46,537 |
59,374 |
1,85 |
|
OJSC SouthTelecom |
19,378 |
24,648 |
4,45 |
|
OJSC Dagsvyazinfrom |
1,795 |
2,284 |
44,11 |
|
OJSC North-West Telecom |
4,102 |
5,220 |
21,01 |
|
OJSC VolgaTelecom |
0,891 |
1,134 |
96,74 |
|
OJSC UralsvyazInform |
87,341 |
111,602 |
0,98 |
|
OJSC CenterTelecom |
3,867 |
4,920 |
22,30 |
|
OJSC FarEastTelecom |
0,939 |
1,195 |
91,81 |
|
OJSC Rostelecom |
- |
- |
86,21 |
The shareholders who voted against reorganization or did not vote at all gained the right to demand the redemption of own shares.
Redemption procedure was completed in October 2010. Rostelecom and RTOs spent over RUR 14 bln on this process. As a result RTOs and Rostelecom purchased shares equal to 2.7% of ordinary shares of a merged company. More than RUR 6 bln of above mentioned amount was spent by Rostelecom for redemption of 28.84% of own preferred shares.
In the beginning of 2011 the reorganization process entered its final stage. In the mid of February 2011 Federal Service of Financial Markets (FSFM) registered additional issue of 2 216 163 000 ordinary shares of OJSC Rostelecom with a nominal price of RUR 0.0025 per share. Moreover FSFM registered new issue of Rostelecom bonds for the total amount of up to RUR 31.56 bln which will be swapped with bonds placed earlier by RTOs.
On April 01, 2011 Federal Tax Service of Russia made a record on RTOs’ liquidation in Uniform State Register of Legal Entities. As a result, RTOs’ shareholders exchanged their RTOs’ shares to new Rostelecom shares and owners of RTOs’ bonds received newly issued Rostelecom bonds.
On March 24, 2012 President of Russia signed Decree ¹ 340 on the reorganisation of OJSC Rostelecom. The Decree states that a unified company will be created by merging Svyazinvest OJSC and its total assets with Rostelecom.
Second stage
As part of reorganization process almost all vital stages were passed: consolidation of SkyLink, Svyazinvest additional share issue, setting the buyout prices, EGM approval of the merger, obligatory buyback, issue of additional ordinary shares in Rostelecom.
The second stage of the reorganisation process is expected to be completed in October 2013 when Svyazinvest will be excluded from the list of legal entities as a result of merging with Rostelecom.