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Articles & publications
21.05.2010
Paper swapVedomosti, Igor Tsukanov
The exchange of telecommunications assets between AFK Sistema and the state is half done: Comstar-UTS, which is controlled by AFK Sistema, has signed an agreement to sell a 25% + 1 share stake in Svyazinvest to Rostelecom for RUR 26 bln. The transaction could be closed by the middle of this summer.
On Wednesday, a purchase and sales agreement for a stake in Svayzinvest was signed by the president of Comstar-UTS Sergey Pridantsev and in the evening by the general director of Rostelecom Anton Kolpakov. This news was reported to Vedomosti by managers on both sides of the transaction. Under the terms of the agreement, Rostelecom becomes the owner of 25% + 1 share in the parent holding pending execution of a number of conditions.
According to Vedomosti’s sources, the conditions are as follows: first, Rostelecom should pay Comstar RUR 26 bln in cash as a result of which the latter will have its RUR 26 bln loan to Sberbank (used as collateral for the blocking stake in Svyazinvest) written off. Rostelecom intends to raise these funds with the help of a bank loan, which will then be refinanced by way of a bonded loan. The second condition is the approval of a transaction between the Federal Anti-Monopoly Service (the application has already been filed). Under the third condition, Rostelecom will be required to obtain consent for the transaction from the board of directors and shareholders. The fourth and final condition is that the transaction should occur concurrently with the exchange of a 100% stake in Sky Link (to be assigned by Sistema to Svyazinvest) for a 23.3% stake in MGTS (to be assigned by Svyazinvest to Comstar-UTS).
In order for the latter deal to be performed it will be necessary to conclude an exchange agreement. The deadline for its signing is the end of August 2010, according to a manger of a company involved in the swap process. But a source within the Svyazinvest Group is hopeful that both transactions will be closed before that time, i.e. in about a month and a half. In order to complete the exchange of the 23.3% stake in MGTS for Sky Link the only thing left to obtain is the approval of the Board of Directors of Svyazinvest. The board is scheduled to examine the issue of divesting the MGTS stake next week, two of its members said.
Ernst & Young appraised the value of a 23.3% stake in MGTS at RUR 9.7 bln at the end of 2009, while 100% of Sky Link is worth RUR 9.4 bln. The difference comes to about RUR 300 mln. This means that Sistema should make up the difference to Svyazinvest. Nonetheless, economically speaking the asset swap is beneficial first and foremost to Sistema and Comstar, according to Gazprombank analyst Anna Kurbatova. As a result of the deal, Comstar will have its debt to Sberbank written off and raise to 94.9% its voting shares in MGTS, which is a strategically important asset that accounts for nearly 1/3 of Comstar’s revenue. The economic benefits for Rostelecom are less apparent for Rostelecom, Kurbatovaya claims, since the operator will gain a stake in the parent company which, in the event of its liquidation, would turn into treasury stakes of Rostelecom itself.
Meanwhile, the concentration of 100% of Svyazinvest in the hands of the state would facilitate the reorganization of the holding, according to a statement made earlier by Telecommunications Minister Igor Schegolev.
Representatives of Rostelecom, Comstar-UTS and Sistema declined to make any official comments concerning the transaction.
MTS to shell out nearly all of its profit
MTS has decided to pay out 99% of its 2009 net profit as dividend to shareholders. This recommendation was confirmed by the cellular operator’s board of directors. In absolute terms, $999.3 mln corresponds to the amount of payouts made in past periods, according to the Chairman of the Board of Directors of MTS, Ron Sommer. If MTS had not written off some of its funds in 2009, payouts would have amounted to 75% of net profit. At the end of 2009, MTS held total cash amounting to $2.5 bln.
Svyazinvest holding company. Shareholders – Federal Property Management Company (75% - one share), Comstar (25% + 1 share). Financial indicators (2009 aggregated RAS data): revenue – RUR 258.8 bln, net profit – RUR 28.5 bln.
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