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Rostelecom OJSC: EGM Statement

  Rostelecom OJSC: EGM Statement

UK Regulatory Announcement

MOSCOW

  ROSTELECOM SHAREHOLDERS APPROVE THE MERGER OF SVYAZINVEST AND A NUMBER OF
              SUBSIDIARIES AS PART OF THE GROUP’S REORGANISATION

Moscow, Russia – June 27, 2013 – Rostelecom OJSC (the “Group”) (MICEX - RTS:
RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator,
today announces that the Extraordinary General Meeting (“EGM”) of Rostelecom
shareholders, held by proxy on June 26, 2013, approved the decision to
reorganise the Company by merging Svyazinvest OJSC (“Svyazinvest”) and 20
other companies^1 which are either directly or indirectly fully owned by
Rostelecom OJSC and/or Svyazinvest OJSC.

The number of shareholders who participated in the EGM comprised 61.6% of the
total number of voting (ordinary and preferred) shares. 97.7% of participating
shareholders voted in favour of the Company’s reorganisation.

Shareholders approved agreements that merge Svyazinvest and other affiliate
companies^1 with Rostelecom. As stipulated by the approved agreement that
merges Svyazinvest and Rostelecom, 14.0547520661157 ordinary Svyazinvest
shares were placed with a nominal value of RUB 1 each, and convert into one
Rostelecom ordinary share which carry a nominal value of RUB 0.0025 each. This
agreement also envisages the cancellation of the Rostelecom ordinary shares
owned by Svyazinvest (Svyazinvest holds the 1,345,556,268 Rostelecom ordinary
shares). The Russian Federation will own more than 50% of Rostelecom, as was
laid out in the Presidential Decree, which initiated Rostelecom’s
reorganisation^2.

Sergey Kalugin, President of Rostelecom, commented: “We are approaching the
final step of the second stage of the Group’s reorganisation. In fact, we have
passed the point of no return and all that is left to complete this stage are
formal procedures relating to the mandatory buyout and on the legal
reorganisation, when the merged companies will cease to exist as separate
legal entities, and their assets and liabilities transfer to Rostelecom. The
reorganisation will eliminate the cross-ownership between Rostelecom and
Svyazinvest and put in place a more transparent and simplified shareholder
structure for the Group. Furthermore, Rostelecom will obtain a number of
interesting assets from Svyazinvest. These latest steps significantly boost
the investment attractiveness of the merged company.”

                                    * * *

For more information please visit http://www.rostelecom.ru/en/ir or contact:

“Rostelecom Investor Relations / Rostelecom IR” application for iPhone and
iPad is now available to download for free from the Apple App Store via:
https://itunes.apple.com/ru/app/rostelecom-investor-relations/id596370946?mt=8.

Investor Relations Department
Tel. +7 (499) 995 97 80
ir@rt.ru

                                    * * *

Rostelecom (www.rostelecom.ru) 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 9.5 million fixed-line broadband subscribers and over 6.8 million
pay-TV subscribers. As Rostelecom develops its mobile data networks, its
position as a major mobile operator is growing with over 13.5 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 77.1 billion of consolidated revenues, RUB
28.8 billion of OIBDA (37.4% of revenues) and RUB 6.4 billion of net income
for the first three months ended March 31, 2013.

                                    * * *

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:

  *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.

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 National Telecommunications OJSC, National Cable Networks OJSC, St.
Petersburg Cable Television Company OJSC, ELKATEL CJSC, National Cable
Networks – EuroAsia OJSC, Novosibirsk Antenna Cable Television Broadcasting
CJSC, Teleset-Service CJSC, ELTELEKOR CJSC, Mosteleset OJSC, Mostelecom OJSC,
TELESET CJSC, TELESET INVEST CJSC, TNPKO OJSC, Simbirsky Telecommunications
Systems CJSC, Svyazinvest CJSC, Russian Telecommunications Network OJSC,
Novgorod Datacom CJSC, Parma-Inform CJSC, ENTER CJSC and Ingushelektrosvyaz
OJSC.

^2 Russian Presidential Decree No 340, dating 24.03.2012 ‘On the
reorganisation of Rostelecom’.

Contact:

Rostelecom OJSC
 
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