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Articles & publications
27.05.2010
Shareholder’s privilegeVedomosti, Oleg Salmanov
Svyazinvest promises to pay out higher dividends on the preferred shares of Rostelecom if the reorganization of the holding goes through successfully.
The holders of Rostelecom’s preferred shares will be able to count on considerably higher dividends than now, if its shareholders meeting approves charter amendments on June 26. This follows from materials prepared for the meeting.
At present, the charter allocates for dividends on preferred shares 10% of net profit with a caveat that the proportion of prefs in the company’s charter capital should be equal to 25%. But after Svyazinvest’s seven regional telecommunications operators (RTOs) and Dagsvyazinform are folded into Rostelecom, the number of common shares will go up four-fold and the proportion of prefs in the company’s will decrease to 7.6%.
This proportion is not stipulated in the new edition of the charter, while dividend payments on prefs remain the same at 10% of net profit. The net profit of the merged company will be higher than it is at the current Rostelecom. The total amount of (RAS) net profit generated by seven RTOs and Rostelecom in 2009 stood at RUR 28.4 bln, whereas Rostelecom contributed only RUR 5.1 bln (18%).
According to forecasts by Rye, Man and Gor Securities, if no changes are made to the charter the dividend yield of preferred shares would be approximately 7%. And if the amendments are approved, the yield could go up to more than 20%. And as estimated by Troika Dialog analyst Evgeny Golosnoi, by 2011 Rostelecom’s preferred dividends are set to go up six-fold compared with the level recorded in 2009.
Adjustments to the charter are to be made at the initiative of Svyazinvest, according to a member of the board of directors of Rostelecom. The purpose of this move is to convince Rostelecom pref holders to vote in favor of the reorganization, he believes. However, a source at Svyazinvest objects and claims that these changes are merely technical.
Whether or not the amendments are approved is still hard to say. The holders of preferred shares will also be asked to vote for them, and at least 75% of these shareholders are expected to vote in favor. However, Rostelecom’s preferred shares are highly dispersed and according to an estimate by the MICEX, 99% are currently in free float. Less than 10% of the holders of preferred shares participated in the 2008 meeting.
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