Deutsche Bank and Russian fund buy stake in Rostelecom for $237 mln
MOSCOW Oct 11 (Reuters) - Russia's state-backed private equity investment fund and Deutsche Bank are investing $237 million in Rostelecom, betting that the telecoms group will benefit from rising demand for high-speed internet services.
State-controlled Rostelecom announced plans in July to sell some of its treasury shares to a pool of investors, led by the Russian Direct Investment Fund (RDIF), to reduce debt.
The RDIF and Deutsche Bank will buy 72.2 million shares in total, the fund and the telecoms operator said in a statement, adding Rostelecom will use the proceeds to help strengthen its market position and reduce debt.
The investment equates to a 2.7 percent stake, Rostelecom said. Deutsche Bank was not immediately available for comment.
Rostelecom is entitled to a portion of profits from any increase in the value of the shares, they said, as the structure of the deal contains agreements relating to call and put options. The investors will also receive protection against a decrease in the share price, they said.