Rostelecom announces post-merger plans; London flotation planned for end-2011

6 Apr 2011

According to the Moscow Times Russian national operator Rostelecom has indicated that it intends to float a number of shares on London Stock Exchange by the end of 2011, and is considering purchasing foreign assets as part of its development strategy. At a press conference to mark the legal completion of its merger with parent company Svyazinvest’s seven ‘mega-regional’ subsidiaries, Rostelecom president Alexander Provorotov told reporters: ‘Key areas for us now are broadband access, paid television, and, if it works out, SkyLink and its mobile broadband access, which means access networks will be a key area of investment. Our goal is to [offer broadband] access to the 35 million households we are [already] working with, and this will require substantial finances, which we will be able to provide in the coming years’. To that end, Provorotov indicated that the newly consolidated company plans to invest approximately 20% of its combined revenues in its own development, which could equate to around USD2 billion.

Although Provorotov emphasised that Rostelecom’s central priorities are domestic, the potential purchase of assets in countries such as Belarus and Poland has been mooted. He continued: ‘We have a lot to do in Russia. Russia is very important for us, yet we do not exclude the possibility of going elsewhere should the opportunity present itself’. Provorotov confirmed that the consolidated telco will preserve the Rostelecom brand name, which he suggested was more recognisable than that of telecoms holding company Svyazinvest. The fate of what is left of Svyazinvest remains in the hands of the government, which is set to make a decision on its overall restructuring in May. Going forward, Rostelecom has disclosed that 43.37% of its shares will belong to Svyazinvest, 2.43% to VTB bank and 7.43% to the Deposit Insurance Agency. It is unclear if the remaining 46.77% of company shares will be floated on the London bourse.

Russia, Rostelecom