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13.05.2010
BoD of Rostelecom places on AGM agenda the issue of a merger with RTOs and Dagsvyazinform, sets share buyback price of shares from shareholders in case of reorganization, and recommends size of 2009 dividends

Press release


The Board of Directors of Rostelecom (RTS and MIXEX: RTKM, RTKMP; OTCQX: ROSYY) at a meeting held in Moscow on May 11, 2010 adopted a decision to include in the agenda of the Annual General Shareholders Meeting the issue of the reorganization of Rostelecom (hereinafter, the company) as a merger with seven regional telecommunications operators: Central Telecommunications Company, Sibirtelecom, Far East Telecom, VolgaTelecom, North-West Telecom, Uralsvyazinform and Southern Telecommunications Company, as well as Dagsvyazinform (hereafter, the companies slated for the merger). 

As part of this issue, the Board of Directors also considered and forwarded for approval by the Annual General Shareholders Meeting the merger agreements between Rostelecom and the companies slated for the merger with the following share conversion ratios for swapping their shares into common shares of Rostelecom: 

The Board of Directors also fixed the buyback price of the company’s shares given that buyback demands could be made by shareholders in the event of a reorganization of Rostelecom. The buyback price was approved as RUR 86.21 both for one common share and one preferred share of Rostelecom. 

The Board of Directors also adopted the decision to include in the agenda of the Annual General Shareholders Meeting of Rostelecom the issue pertaining to the approval of mutually related transactions: purchase-and-sales agreements between Rostelecom and Comstar-UTS and purchase-and-sales agreements between Rostelecom and MGTS Finance S.A. The subject of these agreements is the acquisition of a 25% + 1 share stake of common shares in the charter capital of Svyazinvest with a total cost of RUR 26 bln. 

The Board of Directors of Rostelecom also advised the Annual General Shareholders Meeting to pay out 2009 dividends as follows in 2009: 

• RUR 2.1005 per share on preferred shares. Total payout on preferred shares will amount to RUR 510.1 mln or 10.0% of Rostelecom’s RAS 2009 net profit;
• RUR 1.4002 per share on common shares.  Total payout on common shares will amount to RUR 1,020.3 mln or 20.0% of the company’s RAS 2009 net profit;
• The total amount of Rostelecom’s 2009 dividend payouts will amount to RUR 1,530.4 mln.  The proportion of net profit payable as dividends in 2009 will amount to 30.0%, as was the case for 2008. 

Holders of Rostelecom ADRs will receive dividends based on the following calculation: 1:6 (one ADR corresponds to six common shares) in US dollars through their financial mediator.

In accordance with a decision by the Board of Directors dated April 26, 2010 the date on which the list of persons eligible to attend the Annual General Shareholders Meeting of Rostelecom, and also to receive dividends for 2009 financial activities (record date) was May 7, 2010.

The Annual General Shareholders Meeting of Rostelecom, which is to adopt a decision on paying out dividends for 2009, is scheduled for June 26, 2010 in Rostelecom’s Training Center at the following address: Village of Bekasovo, Naro-Fominsk district, Moscow region.