Russia’s Rostelecom to purchase 3.86% stake under $500 mln buyback

MOSCOW, Jan 24 (PRIME) -- Major Russian telecommunications company Rostelecom plans to purchase 3.86% of its own shares under its U.S. $500 million buyback, the company said Tuesday.

Rostelecom plans to buy back shares via subsidiary Mobitel, which is expected to increase its common stake in the parent company to 6.55% from the current 2.69%, under the buyback.

Mobitel has agreed to take out a 1-year 8.3 billion ruble loan from state-controlled VTB Bank for Rostelecom’s buyback.

The loan is expected to allow for buying back a 1.689% stake, Rostelecom said, adding that the remaining 2.171% stake is also expected to be bought with borrowed funds.

Rostelecom is considering using the buyback procedure to purchase its shares from businessman Suleiman Kerimov, who is seeking to sell his 5.8% common stake in the company, Russian business daily Kommersant reported Monday citing a source close to Rostelecom’s board.

Rostelecom’s board approved the buyback in October 2011.

Rostelecom is indirectly controlled by the government, which holds a 43.4% common stake via telecommunications holding Svyazinvest, a 7.43% common stake via the Federal State Property Management Agency and a 2.4% common stake via state-owned Vnesheconombank (VEB).

(31.3325 rubles – U.S. $1)

End