Rostelecom outlines share buyback procedure as part of its reorganisation

Print version

Moscow, Russia – February 18, 2014 – Rostelecom OJSC (the “Group”) (MOEX: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, today announces the results of its share buyback as part of the Company’s reorganisation which sees the Group spin-off its mobile assets into its subsidiary company, CJSC RT-Mobile.

During the 45-day period following the EGM1, the Company received redemption requests equal to 22.0% of ordinary shares and 49.2% of preferred shares in OJSC Rostelecom by shareholders who voted against the reorganisation, or who abstained from voting. The redemptions are subject to compliance with the legislation of the Russian Federation.

In accordance with Russian legislation that restricts share buybacks to 10% of the value of a company’s net assets2, the shares will be bought back from shareholders on a pro rata basis3 at a rate of 27.8%4.The Company will invest a total of RUB 23.161 billion in the share buyback.

As a result, the Company will acquire 6.1% of its own ordinary shares and 13.7% of its preferred shares.

Rostelecom will use both its own and short-term credit resources to finance the buyout. The Company plans to fully repay any loans obtained for this buyback in the second quarter of 2014. Rostelecom will use cash received following the redemption of intragroup debt of Rostelecom’s mobile assets, which are to be transferred to a joint venture with Tele 2 Russia as part of the first stage of the transaction.

1 This timeframe is specified in Article 76, clause 3 of the law “On Joint Stock Companies”
2 The company’s net assets value as of 30 November 2013 reached 231, 609, 122 thousand rubles
3 Article 76, clause 5 of the law “On Joint-Stock Companies”
4 The exact ratio is 27.7828365937661%