M. Stulov

Marshall Capital Partners has signed an agreement to buy out from Gazprombank a fund that owns shares in the subsidiaries of the state holding Svyazinvest – seven interregional companies (IRCs) and Rostelecom. This was reported to Vedomosti by Marshall Capital Partners Managing Partner Konstantin Malofeev and confirmed by the head of the Gazprombank Group asset trust management business Anatoly Milyukov. The deal should be closed within a month, Malofeev expects.

OJSC Svyazinvest

Management holding. Controls seven interregional fixed-line companies and the long-distance operator Rostelecom, as well as 23.3% of MGTS. Shareholders: Rosimushchestvo (75% minus 1 share), Comstar-OTS (25% plus 1 share). Financial indicators (consolidated management reporting, 2009): revenue - 269.4 billion rubles, net profit - 23.5 billion rubles.

By March, Svyazinvest should complete the reorganization: seven MRKs and Dagsvyazinform will join Rostelecom. Marshall will receive about 7% in the merged operator, say Malofeev and Milyukov – this is the entire volume of the fund collected by Gazprombank. Marshall will become a co-owner of all companies participating in the reorganization, except for Dagsvyazinform, but will receive the largest packages in CenterTelecom (22% of ordinary shares), VolgaTelecom (8%) and Southern Telecommunications Company (UTK, 14%). Neither Malofeev nor Milyukov disclosed the amount of the deal, but they say that it is close to the current price of the acquired packages. The value of the companies was estimated at approximately four times the projected EBITDA of each of them for 2010, Malofeev specified.

CenterTelecom, UTK and Volgatelecom became the leaders among Svyazinvest subsidiaries in terms of growth rates of quotations in late 2009 – early 2010. It was then that Ernst & Young, hired by Svyazinvest to assess the value of its subsidiaries, began calculating the exchange ratios of their shares, and market participants immediately suspected that some insider was buying up the shares of MRK. And by the summer of 2010 it became known that the shares of many Svyazinvest subsidiaries were under the control of Gazprombank. It was claimed that the securities were being acquired in the interests of the “client”.

Milyukov does not say who it was. And the negotiations with Marshall, according to him, lasted several months. "Substantive negotiations with Gazprombank became possible only after the Svyazinvest companies made decisions to create a united Rostelecom," Malofeev asserts. "It was very important for us to get a share in the united company, and not in the disparate MRKs. Only after the reform was approved by the boards of directors [of MRKs and Rostelecom] did the merger process become irreversible."

The rally with MRK shares took place back in the fall of 2009, and market participants already then linked it to the appearance of exchange coefficients, recalls Unicredit Securities analyst Nadezhda Golubeva (see chart on www.vedomosti.ru). But MRK and Rostelecom shares still have great growth potential, Malofeev is sure: investors believed in the prospects of operators betting on data transmission, and Rostelecom will do just that.

Marshall Capital to Become Rostelecom's Largest Shareholder