Swedish shareholders of STS are getting rid of their shares due to the new law on the owners of Russian media

The Swedish MTG Group announced its readiness to sell its entire stake in CTC Media - 39%, reported on Wednesday, March 4, citing two people close to the Russian media holding and a source close to its foreign shareholder. Vedomosti newspaper

According to the publication's sources, the investment bank UBS several weeks ago sent potential investors an offer to participate in the capital of CTC Media. An employee of a large Russian holding confirmed in a conversation with the newspaper that he had received the offer.

The newspaper's sources attribute MTG Group's decision to sell its assets in CTC Media to restrictions prohibiting foreign investors from owning more than 20% of shares or interests in Russian media. State Duma deputies approved the corresponding restrictions in the fall of 2014. If they refuse to comply with state requirements before the beginning of 2016, the channels risk losing their broadcast licenses.

The CTC Media holding owns the channels CTC, Domashny, Peretz, and CTC Love. The founders of all channels are Russian legal entities, but 100% of their shares are owned by a holding company registered in the US state of Delaware, the newspaper clarifies.

The largest shareholder of CTC Media is the Swedish MTG Group, in second place in terms of volume is the Cypriot offshore Telcrest of Yuri Kovalchuk and his partners with a blocking stake, another 36% are in free float. Thus, CTC Media needs to remove more than 50% of its shares from the control of foreigners by the end of the year, Vedomosti writes.

According to the publication, MTG Group discussed the deal with Kovalchuk’s structures, but the parties did not agree. The situation is complicated by the fact that Kovalchuk is subject to EU and US sanctions; accordingly, companies and citizens from these countries cannot conduct transactions with persons from the “black list”, and the parent company CTC Media is registered in Delaware. But perhaps an intermediary will be involved in the deal, says one of the sources.

Representatives of CTC Media and Kovalchuk’s National Media Group refused to comment on this information. MTG Group did not respond to the publication’s request.

The company's shares are traded on NASDAQ. On March 3, the capitalization of CTC Media amounted to $680.7 million (as of 20.00 Moscow time). Thus, the MTG package was worth $265.5 million.

Swedish MTG will sell 39% of CTC Media