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Articles & publications
03.03.2010
KIT Finance wraps up deal for the sale of DIA’s 30% and VEB’s 9.8% stake in RostelecomRBC
KIT Finance investment bank has completed a transaction involving the sale of a 30% stake in Rostelecom’s common shares to state-owned corporation Deposit Insurance Agency and a 9.8% stake to state corporation Bank of Development and Foreign Economic Affairs (Vnesheconombank, VEB). As noted in a statement issued by the operator, a change in the stakes of the above-mentioned state corporations in Rostelecom occurred on March 2, 2010.
It’s noteworthy than KIT Finance, in accordance with a plan for the bank’s financial rehabilitation, was to sell 29.999% of Rostelecom’s shares to DIA for a total of RUR 50.278 bln. All in all, 218,600,000 of Rostelecom’s common shares were subject to sale (registration number issue 1-01-00124-À) for the price of RUR 230 per one share. Another 10% stake in Rostelecom held by KIT Finance was to be assigned to Vnesheconombank. At a later time, Prime Minister Vladimir Putin instructed DIA to turn over its stake in Rostelecom to Vnesheconombank for management. At the end of January 2010 the Federal Anti-Monopoly Service (FAS) of the Russian Federation approved VEB’s application to receive 29.999% of Rostelecom’s voting shares for trust management.
The plan is to roll out a “national champion” on the basis of Rostelecom, by folding Svyazinvest’s regional telecommunications operators into the national LD operator. Based on Svyazinvest’s estimates, the total capitalization of the merged company could exceed RUR 420 bln.
Rostelecom is Russia’s flagship LD and ILD telecommunications operator. The company operates a 150,000-km transport telecommunications network which consists of digital and analog lines. Rostelecom services the bulk of DLD and outgoing ILD traffic in Russia, and ensures the operations of a land-based television and radio-broadcasting channels. Rostelecom’s largest shareholder, Svyazinvest, owns 50.67% of its voting shares. Rostelecom’s RAS net profit in the first nine months of 2009 decreased by 34.3% compared to the same period in 2008 and stood at RUR 4,553,600,000. The operator’s IFRS net profit, according to 9M09 consolidated data decreased by 73.5% to RUR 3.261 bln.
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