ROSTELECOM PJSC (RKMD)
Rostelecom closes the deal to consolidate 100% of Tele2 Russia
Moscow, Russia - March 17, 2020 - Rostelecom PJSC (MOEX - RTS: RTKM, RTKMP; OTCQX: ROSYY), Russia's national telecommunications operator, announces closing of the transaction to acquire 55% of T2 RTK Holding OJSC (Tele 2 Russia). The deal saw Rostelecom finalize the consolidation of 100% of Tele2 Russia and VTB bank with a consortium of investors becoming owners of 29.4% ordinary shares in Rostelecom.
In line with the agreed deal structure, approved by Board of Directors, Rostelecom has finalized the settlements with VTB Bank and its partners to acquire the remaining 55% shares in Tele 2 Russia, including:
The deal was partly financed through equity raise of RUB 66 billion, resourced from the additional share issue and private subscription of Rostelecom ordinary shares awarded to VTB bank.
As a result of this additional share issue, the number of ordinary shares in Rostelecom's charter capital has increased by 708, 082, 975 shares to 3,282,997,929 shares (including shares acquired in-line with preemptive rights). On 16 March 2020, Central Bank of Russia registered the Report on Rostelecom's additional ordinary share issue.
Anna Shumeiko, Senior Vice-President, the Chief of Staff of the President of Rostelecom, commented: "Tele 2 Russia consolidation is a historic moment for the Russian telecommunications market and pivotal for Rostelecom. The largest transaction of the recent years will enhance Rostelecom's leading position in the digital service market, adding to the Company's financial and business resilience and long-term sustainability. In the near future, we will be updating our key strategic priorities with an ultimate goal to increase Rostelecom's fundamental value through providing cutting edge digital services to Russian households, business and state. We are also excited to see VTB and its partners become our long-term strategic shareholders whose motivation matches our aim to increase capitalization".
Further information is available at https://www.company.rt.ru/en/ir/news_calendar/.
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Rostelecom is the largest digital service provider, operating in all segments of the telecommunications market in Russia, it serves millions of households, the state and private enterprises across the country.
Rostelecom is Russia's undisputed market leader, providing high-speed Internet access to over 13.2 million users and pay-TV services to more than 10.4 million clients, over 5.6 million of which are subscribed to Rostelecom's IPTV services.
In the twelve months of 2019, the Group generated RUB 337.4 billion of revenues, RUB 106.5 billion of OIBDA (31.6% of revenue) and RUB 16.5 billion of net income.
The Group is the leading provider of telecommunications services to government bodies and corporates of all levels.
Rostelecom is a key strategic innovator that provides solutions in the following fields: E-Government, cybersecurity, data-centers and cloud computing, biometry, healthcare, education and housing & utility services.
The Group's stable financial position is confirmed by its credit ratings. Rostelecom has been assigned 'BBB-' and 'BB+' international credit ratings by Fitch Ratings and Standard & Poor's respectively, and AA(RU) by ACRA.
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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 intended to be covered by the safe harbours created thereby.
Those forward-looking statements include, but are not limited to:
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:
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 upon the annual report publication or to reflect the occurrence of unanticipated events, except as may be required under applicable laws.
 Rostelecom Board of Directors' resolution (Minutes No. 06 dd. 13 November 2019)
 Total number of ordinary shares prior to the additional issue
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