Rostelekom OAO outlines share buyback procedure as part of its reorganization
Rostelekom OAO:Announces the results of its share buyback as part of the company’s reorganization which sees the group spin-off its mobile assets into its subsidiary company, CJSC RT-Mobile.Says during the 45-day period following the EGM, it received redemption requests equal to 22.0 pct of ordinary shares and 49.2 pct of preferred shares in Rostelecom by shareholders who voted against the reorganization, 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 percent of the value of a company’s net assets, the shares will be bought back from shareholders on a pro rata basis at a rate of 27.8 percent.The company will invest a total of 23.161 billion Russian rubles in the share buyback.As a result, the company will acquire 6.1 percent of its own ordinary shares and 13.7 percent 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.
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