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29.07.2010
VEB to take Rostelecom stake: the bank’s steering committee approves reverse buyback of its stake in the operatorRBC Daily Online
Elizaveta Sergina
VEB has agreed to the terms for buying back a stake in Rostelecom as proposed by state holding Svyazinvest. Over the next 3-4 years, 10% of the operator will be bought back by the bank itself at a price not less than RUR 230 per share.
The Steering Committee of VTB has agreed to go ahead with a transaction involving the reverse purchase of a stake in Rostelecom: securities are to be bought back at RUR 230 per share, RIA RBC reported. According to the head of VEB Vladimir Dmitriev, these conditions will make it possible for the bank to break even on the transaction. The deal factors in both VEB’s purchase price for this stake and the cost of borrowed resources at which the purchase was struck. Mr. Dmitriev pointed out that there are two options for buying back the stake in three and four years. “We proceed from the assumption that the reorganization of the telecommunications system and the share swap of RTOs will go ahead as planned by Svyazinvest”, he said.
Development Bank VTB paid RUR 250 for each of the operator’s securities when it bought a stake in Rostelecom from KIT Finance. In 2008 KIT Finance commenced the procedure of financial rehabilitation and was forced to relinquish its stake in Rostelecom. The purchase was made in summer 2009 and at that time VEB bought 10% of the operator.
Sources close to the operator earlier told RBC Daily that the option was necessary to ensure that all parties are interested in the holding’s reorganization. “This way VEB will have a guarantee that its stake will not fall in price when the merger process is complete. And Svyazinvest, in turn, will have a guarantee that the reorganization is approved by all of Rostelecom’s shareholders”, one of RBC Daily’s sources said. The reorganization of the holding was approved at a shareholders meeting in June.
Deposit Insurance Agency (DIA) also participated in the buyback of Rostelecom shares. The agency took about 29.9% of the operator’s shares and assigned them to VEB for management. However, sources close to Svyazinvest claim that Rostelecom itself does not plan to buy back this block of shares.
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