ROSTELECOM OUTLINES SHARE BUYBACK PROCEDURE AS PART OF ITS
Moscow, Russia – February 19, 2014 – Rostelecom OJSC (the “Group”)
(MOEX: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications
operator, today announces the results of its share buyback as part of
the Company’s reorganisation which sees the Group spin-off its mobile
assets into its subsidiary company, CJSC RT-Mobile.
During the 45-day period following the EGM1, the Company
received redemption requests equal to 22.0% of ordinary shares and 49.2%
of preferred shares in OJSC Rostelecom by shareholders who voted against
the reorganisation, or who abstained from voting. The redemptions are
subject to compliance with the legislation of the Russian Federation.
In accordance with Russian legislation that restricts share buybacks to
10% of the value of a company’s net assets2, the shares will
be bought back from shareholders on a pro rata basis3 at a
rate of 27.8%4. The Company will invest a total of RUB 23.161
billion in the share buyback.
As a result, the Company will acquire 6.1% of its own ordinary shares
and 13.7% of its preferred shares.
Rostelecom will use both its own and short-term credit resources to
finance the buyout. The Company plans to fully repay any loans obtained
for this buyback in the second quarter of 2014. Rostelecom will use cash
received following the redemption of intragroup debt of Rostelecom’s
mobile assets, which are to be transferred to a joint venture with Tele
2 Russia as part of the first stage of the transaction.
For more information please visit http://www.rostelecom.ru/en/ir
“Rostelecom Investor Relations / Rostelecom IR” application is
now available to download for free from the Apple App Store and Google
Investor Relations Department
Tel. +7 (499) 995 97 80
is Russia’s largest national telecommunications operator with presence
in all Russian regions. The Group is a universal operator and
undisputable leader of broadband and pay-TV markets in Russia with over
9.8 million fixed-line broadband subscribers and over 7.0 million pay-TV
subscribers. As Rostelecom develops its mobile data networks, its
position as a major mobile operator is growing with over 14.1 million
currently subscribed to Rostelecom’s mobile voice services. The Group is
also an important innovator that provides solutions in the field of
medicine, E-Government, cloud computing and education.
Rostelecom was assigned a ‘BBB-’ and ‘BB+’ international credit ratings
by Fitch Ratings and Standard & Poor’s respectively, both with a
‘Stable’ outlook. The Group generated RUB 232.3 billion of consolidated
revenues, RUB 87.1 billion of OIBDA (37.5% of revenues) and RUB 24.2
billion of net income for the first nine months ended September 30, 2013.
* * *
Management’s assessment of the Company’s future operating and
financial results as well as forecasts of the present value of future
cash flows and related factors;the Company’s anticipated capital expenditures and plans to
construct and modernize its network;the Company’s expectations as to the growth in demand for its
services, plans relating to the expansion of the range of its services
and their pricing;the Company’s plans with respect to improving its corporate
governance practices;the Company’s expectations as to its position in the
telecommunications market and the development of the market segments
within which the Company operates;economic outlook and industry trends;the Company’s expectations as to the regulation of the Russian
telecommunications industry and assessment of impact of regulatory
initiatives on the Company’s activity;other statements regarding matters that are not historical facts.
Certain statements in this press release are forward-looking
statements within the meaning of the U.S. federal securities laws and
are intended to be covered by the safe harbors created thereby.
Those forward-looking statements include, but are not limited to:
Such forward-looking statements are subject to risks, uncertainties
and other factors, which could cause actual results to differ materially
from those expressed or implied by these forward-looking statements.
These risks, uncertainties and other factors include:
risks relating to changes in political, economic and social
conditions in Russia as well as changes in global economic conditions;risks relating to Russian legislation, regulation and taxation,
including laws, regulations, decrees and decisions governing the
Russian telecommunications industry, securities industry as well as
currency and exchange controls relating to Russian entities and their
official interpretation by regulatory bodies;risks relating to the Company, including the achievement of the
anticipated results, levels of profitability and growth, ability to
create and meet demand for the Company’s services including their
promotions, and the ability of the Company to remain competitive in a
liberalized telecommunications market;technological risks associated with the functioning and development
of the telecommunications infrastructure, technological innovations as
well as the convergence of technologies;other risks and uncertainties. For a more detailed discussion of
these and other factors, see the Company’s Annual Report and the
Company’s other public filings.
Many of these factors are beyond the Company’s ability to control or
predict. Given these and other uncertainties, readers are cautioned not
to place undue reliance on any of the forward-looking statements
contained herein or otherwise. The Company does not undertake any
obligation to release publicly any revisions to these forward-looking
statements (which are made as of the date hereof) to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events, except as may be required under applicable laws.
1 This timeframe is specified in Article 76, clause 3 of the
law “On Joint Stock Companies”
2 The company’s net assets value as of 30 November 2013
reached 231, 609, 122 thousand rubles
3 Article 76, clause 5 of the law “On Joint-Stock Companies”
4 The exact ratio is 27.7828365937661%
Source: Rostelecom OJSC