Rostelecom Outlines Share Buyback Procedure as Part of Its Reorganisation

MOSCOW--()--

ROSTELECOM OUTLINES SHARE BUYBACK PROCEDURE AS PART OF ITS REORGANISATION

Moscow, Russia – February 19, 2014 – Rostelecom OJSC (the “Group”) (MOEX: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, today announces the results of its share buyback as part of the Company’s reorganisation which sees the Group spin-off its mobile assets into its subsidiary company, CJSC RT-Mobile.

During the 45-day period following the EGM1, the Company received redemption requests equal to 22.0% of ordinary shares and 49.2% of preferred shares in OJSC Rostelecom by shareholders who voted against the reorganisation, 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% of the value of a company’s net assets2, the shares will be bought back from shareholders on a pro rata basis3 at a rate of 27.8%4. The Company will invest a total of RUB 23.161 billion in the share buyback.

As a result, the Company will acquire 6.1% of its own ordinary shares and 13.7% 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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For more information please visit http://www.rostelecom.ru/en/ir or contact:

“Rostelecom Investor Relations / Rostelecom IR” application is now available to download for free from the Apple App Store and Google Play

Investor Relations Department

Tel. +7 (499) 995 97 80

ir@rt.ru

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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 9.8 million fixed-line broadband subscribers and over 7.0 million pay-TV subscribers. As Rostelecom develops its mobile data networks, its position as a major mobile operator is growing with over 14.1 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 232.3 billion of consolidated revenues, RUB 87.1 billion of OIBDA (37.5% of revenues) and RUB 24.2 billion of net income for the first nine months ended September 30, 2013.

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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 This timeframe is specified in Article 76, clause 3 of the law “On Joint Stock Companies”

2 The company’s net assets value as of 30 November 2013 reached 231, 609, 122 thousand rubles

3 Article 76, clause 5 of the law “On Joint-Stock Companies”

4 The exact ratio is 27.7828365937661%

Short Name: Rostelecom OJSC
Category Code: MSC
Sequence Number: 408197
Time of Receipt (offset from UTC): 20140219T062218+0000

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