Rostelecom sale delayed until 2013; ‘complicated’ ownership must be resolved first

16 Aug 2011

According to Kommersant, the Russian government is unlikely to dispose of its stake in recently enlarged national telecoms operator Rostelecom before September 2013, by which date the state aims to have wrapped up its comprehensive reform of the group. As previously reported by TeleGeography’s CommsUpdate, on 1 April 2011 Rostelecom merged seven so-called ‘mega-regional’ telcos into its central operation, namely: North-West Telecom, CenterTelecom, Southern Telecommunications, VolgaTelecom, Uralsvyazinform, Sibirtelecom and Far East Telecom. All seven firms had previously operated under the control of state-owned telecoms holding company Svyazinvest. The transition from long-distance operator to full-service telecoms provider is aimed at boosting the overall efficiency of state-owned telecoms assets.

In May 2011 Rostelecom applied to the financial markets regulator to list up to 25% of its shares on an overseas stock exchange. In a disclosure document revealed that month, the telco indicated that it intends to list 735.8 million shares, out of a total of around three billion, most likely on the London Stock Exchange, by the end of 2011. However, telecoms minister Igor Schegolev explained: ‘As a rule, before a company can place shares on an exchange it has to present auditable accounting documents for the previous year. Therefore, it would be proper to consider such a possibility from 2012’.

Citing a new timetable approved by deputy prime minister Sergei Ivanov, Kommersant reports that the next stage of reorganisation is scheduled for completion by September 2013, with the chief stumbling block thought to be Rostelecom’s ‘complicated ownership structure’. The government directly owns 40.07% of the share capital in the group, but has indirect control of the telco via two state-owned entities, the Depository Clearing Company (11.99%) and Vnesheconombank (6.86%). Deputy president Igor Shuvalov has previously stated that Svyazinvest will cease to exist as a company after the reorganisation.

Russia, Rostelecom