Rostelecom (ROSYY: OTC Link) | ROSTELECOM ACQUIRES 100% CONTROL OF MOSTELESET

ROSTELECOM ACQUIRES 100% CONTROL OF MOSTELESET

May 25, 2012

OTC Disclosure News Service

Moscow, Russian Federation –

Moscow, Russia – May 24, 2012 –Rostelecom OJSC (MICEX – RTS: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator,today announces that OJSC National Telecommunications (“NTK”), its wholly-ownedsubsidiary, has won a tender to acquire 1.74 billion ordinary shares(representing a 26% shareholding) in OJSC Mosteleset (“Mosteleset”) for a totalcash consideration of RUB 1.8 billion. Mosteleset, through its wholly-ownedsubsidiary Mostelecom, owns data and pay TV networks in Moscow, which are usedby the NTK Group of companies[1] toprovide services to their subscribers. According to the terms of the tender, itis expected that the sale agreement will be signed and the transactionconcluded in the near future. NTK’s acquisition of a 26% stake in Mostelesetgives Rostelecom 100% control of Mosteleset.

 

Alexander Provotorov, President of Rostelecom,commented: “The consolidation of a 100% stake in Mosteleset enables us to fullyintegrate NTK’s network infrastructure into the structure of Rostelecom, totake forward the legal restructuring and consequently streamline our assetmanagement structure. Rostelecom will also stop accounting for Mosteleset’sminority shareholders in its consolidated financial reports. Additionally, itbecomes easier for Rostelecom to manage Mosteleset and it gives us theflexibility to carry out capital construction and network modernisation programmes quickly in order to provide high quality services toMoscow subscribers.”

 

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[1] NTK, through Mosteleset, also controls a 51% stake in OJSC Makomnet,which owns the network in the Moscow Metro and provides services to some ofNTK’s corporate clients

 

 

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For more information please visit www.rostelecom.ruor contact:

 

Investor Relations Department

Tel. +7 (499) 995 97 80

ir@rt.ru

 

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Rostelecom (www.rostelecom.ru)is Russia’s national telecommunications operator and now also includes theregional incumbent telecommunications operators (CentreTelecom, SibirTelecom,Dalsvyaz, Uralsvyazinform, VolgaTelecom, North-West Telecom and SouthernTelecommunications Company) and Dagsvyazinform. Rostelecom has the largestdomestic backbone network (approximately 500 thousand km) and last mileconnections to approximately 43 billion households in Russia. The Company holdslicences to provide a wide range of telecommunications services (telephony,data, TV and value-added solutions) to residential, corporate and governmentalsubscribers and fourth party operators across all regions of the RussianFederation. The Rostelecom brand is one of Russia’s ten most trusted brands(source: Romir market research).

 

Rostelecom’s ordinary and preferred shares are tradedon the MICEX-RTS (RTKM, RTKMP) stock exchange, and its depository receipts aretraded over-the-counter in the United States on the OTCQX under the symbol‘ROSYY’. Rostelecom is majority owned (53.2% of ordinary shares) by the RussianGovernment and has a free float of less than 40% of the outstanding ordinaryshares and over 70% of the outstanding preferred shares. StandardPoor’shas assigned Rostelecom a ‘BB+’ international credit rating with a ‘Stable’outlook. Rostelecom had 28.5 billion local fixed-line voice subscribers, 12.5billion mobile voice subscribers, 8.2 billion fixed-line broadband subscribersand 5.9 billion pay-TV subscribers at the end of 2011. The Group generated RUB296.0 billion of consolidated revenues, RUB 117.7 billion of OIBDA (39.8% ofrevenues) and RUB 46.1 billion of net income for the twelve months endedDecember 31, 2011.

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Certain statements in this press release are forward-looking statementswithin the meaning of the U.S. federal securities laws and are intended to becovered 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 resultsas well as forecasts of the present value of future cash flows and relatedfactors;

•           theCompany’s anticipated capital expenditures and plans to construct and modernizeits network;

•           theCompany’s expectations as to the growth in demand for its services, plansrelating to the expansion of the range of its services and their pricing;

•           theCompany’s plans with respect to improving its corporate governance practices;

•           theCompany’s expectations as to its position in the telecommunications market andthe development of the market segments within which the Company operates;

•           economicoutlook and industry trends;

•           theCompany’s expectations as to the regulation of the Russian telecommunicationsindustry and assessment of impact of regulatory initiatives on the Company’sactivity;

•           otherstatements regarding matters that are not historical facts.

 

Such forward-looking statements are subject to risks, uncertainties andother factors, which could cause actual results to differ materially from thoseexpressed or implied by these forward-looking statements. These risks,uncertainties and other factors include:

•           risksrelating to changes in political, economic and social conditions in Russia aswell as changes in global economic conditions;

•           risksrelating to Russian legislation, regulation and taxation, including laws,regulations, decrees and decisions governing the Russian telecommunicationsindustry, securities industry as well as currency and exchange controlsrelating to Russian entities and their official interpretation by regulatorybodies;

 

•           risksrelating to the Company, including the achievement of the anticipated results,levels of profitability and growth, ability to create and meet demand for theCompany’s services including their promotions, and the ability of the Companyto remain competitive in a liberalized telecommunications market;

•          technological risks associated with the functioning and development of thetelecommunications infrastructure, technological innovations as well as theconvergence of technologies;

•           otherrisks and uncertainties. For a more detailed discussion of these and otherfactors, see the Company’s Annual Report and the Company’s other publicfilings.

 

Many of these factors are beyond the Company’s ability to control orpredict. Given these and other uncertainties, readers are cautioned not toplace undue reliance on any of the forward-looking statements contained hereinor otherwise. The Company does not undertake any obligation to release publiclyany revisions to these forward-looking statements (which are made as of thedate hereof) to reflect events or circumstances after the date hereof or toreflect the occurrence of unanticipated events, except as may be required underapplicable laws.


[1] NTK, through Mosteleset, also controls a 51%stake in OJSC Makomnet, which owns the network in the Moscow Metro and providesservices to some of NTK’s corporate clients 

The above news release has been provided by the above company via the OTC Disclosure and News Service. Issuers of news releases and not OTC Markets Group Inc. are solely responsible for the accuracy of such news releases.

Article source: http://www.otcmarkets.com/stock/ROSYY/news?id=48053

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