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Articles & publications
29.06.2010
Formation of single national operator on the base of Rostelecom nears completionITAR-TASS
The reorganization process of state-owned telecommunications holding Svyazinvest, with Rostelecom as the key asset and consolidation hub, is approaching the finish line. As the press service of Svyazinvest announced today to ITAR-TASS, the reorganization process of the holding has reached “the point of no return”, as the shareholders of all seven of the holding’s regional telecommunications operators (RTOs) have voted to merge with Rostelecom.
Rostelecom’s shareholders, in turn, also voted at its annual general shareholder’s meeting for the merger with RTOs. On Saturday, a total of 73.5% of the voting shares were represented at the meeting, of which 97.2% voted in favor of the merger. The general director of Svyazinvest Evgeny Yurchenko was pleased with the results. “We’re pleased that the shareholders of all the companies voted nearly unanimously to support the reorganization process. Of course the results differed at the various RTOs, but only by a few percentage points”, he pointed out.
The Svyazinvest Group of companies is the largest telecommunications company in Russia and one of the biggest telecommunications groups in the world. Its assets include seven regional fixed-line telecommunications operators: VolgaTelecom, Uralsvyazinform, Sibirtelecom, CenterTelecom, Southern Telecommunications Company, North-West Telecom, Far East Telecom, and also national DLD and ILD operator Rostelecom. RTOs own over 80% of Russia’s telecommunications infrastructure. As noted earlier by head of the Telecommunications Ministry Igor Schegolev, once the restructuring process has been completed, Svyazinvest should become a serious operator and a key industry player, remaining under state control.
The legal process of the holding’s reorganization, as a result of which a single universal operator will arise instead of 9 operators, is to be wrapped up in February or March of 2011. According to Mr. Yurchenko, once the merged company is established, “changes will be made to technical policy, the corporate governance system, radical amendments will be made to the accounting system, as well as supervision and corporate financial structures”. Most of the work to be done is related to the merger of all of the holding’s cellular assets, which number 14 companies, and also folding Sky Link into this structure.
The holding’s plans in the near future include buying back shares from the minority shareholders who are opposed to the Rostelecom merger. Their shares should be bought back by September. The shares of RTOs, which participate in the reorganization, are to be converted into shares of the merged Rostelecom, which is expected to launch a share issue in February 2011.
"I’m certain that this will be an outstanding blue chip on the Russian financial market, which will be listed on all major indices, including MICEX and RTS, and if we are to speak of Russia’s future course of financial events, it will not be possible to do so without reference to the merged Rostelecom”, Yurchenko noted.
The new company’s board of directors, Yurchenko predicts, will have a bigger lineup than now at Rostelecom, at least 17 members. In addition, there will be a larger number of independent directors. He attributes this to the fact that the state expects to own from 53-59% of the company’s total equity, whereas the remainder will be allocated to free float.
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