The operator reschedules the SPO

As Kommersant has learned, Rostelecom is postponing the public offering of treasury shares, which was planned for the second half of 2014. The reason is fluctuations in stock prices and uncertainty about the timing of the privatization of the state-owned company.

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Drawing: Kommersant / Viktor Chumachev

Photo: Kommersant / Roman Yarovitsyn

At the end of last week, Rostelecom shares fell in price to 73.6 rubles, this is the minimum value since the formation of the united company in 2010. Back in December, the company had plans to conduct an SPO in the second half of 2014. It was planned to sell up to 15% of shares for no less than 120 rubles. per share in the amount of up to 46 billion rubles. In addition, the government expected to privatize 46.99% of Rostelecom's ordinary shares this year. Yesterday on the Moscow Exchange, an ordinary share of Rostelecom increased in price by 8.75%, to 84.5 rubles. for paper. The operator's capitalization amounted to RUB 225.5 billion. “But due to the unstable current situation in the capital markets, especially developing markets, as well as uncertainty regarding the timing, form and volume of the planned privatization, a decision on the timing of the SPO cannot now be made,” a source close to “Kommersant” told Kommersant. Rostelecom". The deal is being postponed, for how long it is unknown, says a member of the operator’s board of directors.

As part of 15% of treasury shares, Rostelecom planned to sell at the SPO both 7.2% of ordinary and 17.5% of preferred shares purchased from minority shareholders in September during a buy back. The purchase price was 30.25 billion rubles, or 136.05 rubles. for regular and 95.24 rubles. per preferred share. According to the law on joint-stock companies, these shares must be sold at a price not lower than their market value no later than September or redeemed. According to Kommersant's sources, Rostelecom plans to sell treasury shares to its subsidiary, Mobitel LLC. The transaction amount will be 27.6 billion rubles, shares will be sold at 123.93 rubles. for ordinary and 87.8 rub. for the pref, that is, at the price of the buyout from minority shareholders who disagree with the allocation of mobile assets, which ended last week. The deal will be formalized in the form of a forward agreement between Rostelecom and Mobitel; the operator's board of directors will consider the document on March 28, the company reported yesterday.

But Mobitel, whose debts exceed 26 billion rubles. (8 billion rubles excluding interest to VTB and 17.6 billion rubles to Rostelecom), cannot attract new loans. The situation is also complicated by the fact that due to the decline in the value of Rostelecom shares (Mobitel owns 9.38% of the company’s ordinary shares), the value of the LLC’s net assets is below the level of its capital (about 14.9 billion rubles), which is by law about the LLC may require its liquidation, Kommersant's sources say.

To solve these problems in one fell swoop, Rostelecom plans to contribute almost 44.4 billion rubles to the authorized capital of Mobitel. Another 9.3 billion rubles. Mobitel has already received from Rostelecom, since it participated in the mandatory repurchase of the operator’s shares. That is, Rostelecom will finance its subsidiary for 53.7 billion rubles. According to Kommersant's sources, this amount should be enough to pay off all Mobitel's debts and buy back treasury shares from Rostelecom, which are under threat of imminent redemption.

The press service of Rostelecom did not comment on the possible transaction until a decision was made on it. According to the former general director of Svyazinvest, owner of 1.2% of Rostelecom shares, Evgeny Yurchenko, treasury shares would have to be redeemed in order to increase the share of the state and other shareholders.

Now Rostelecom directly and through Mobitel controls about 25% of its own shares. The company has already tried to sell some of these securities to VTB (see Kommersant, January 30). The decision on the fate of treasury shares should be made in conjunction with the decision on the privatization of the state stake in Rostelecom, the operator’s president, Sergei Kalugin, recently said. Such a decision will be made by the new owner of the state stake in Rostelecom, an official of the Federal Property Management Agency (owns 46.99% of ordinary shares in Rostelecom) did not rule out. Deutsche Bank analyst Igor Semenov is surprised that Rostelecom is deciding to postpone the SPO “without waiting for the outcome with Crimea.”

Vladislav Novy, Denis Skorobogatko

Rostelecom disconnects from investors