Russian investor Roternberg calls off buying stake in Rostelecom.

By bne IntelliNews April 11, 2013

Bellared Holdings Limited, controlled  by billionaire Arcady Rotenberg and Universal Telecom Investments Strategies of Konstantin Malofeev, is calling off the planned acquisition of 10.7% stake in Russia’s state-controlled long-distance operator Rostelecom, Interfax reports citing the joined statement by the companies. The reasons for cancellation of what previously was referred to as a done deal is the Cyprus crisis, as the deal was supposed to be carried out by Cyprus-based subsidiaries on the buyers side. However, Interfax adds that according to its sources, the deal was broken by Rostelecom due to recent acquisition of Tele 2 Russia by state-controlled bank VTB, which changed the market landscape and brought understanding that the assets to be sold have a greater potential.

To remind, according to a report by Vedomosti, after the recent sale to the country’s second largest bank state-controlled VTB, the Russian business of Tele2 might be set up as a joint venture with major fixed-line operator Rostelecom which already has 3G and 4G licenses. VTB was reportedly in talks over the deal with Arcady Rotenberg, an investor in Rostelecom. For Rostelecom this would mean becoming a fourth largest operator in Russia, following the “big three” MTS, VimpelCom, and MegaFon.

In a separate announcement, the head of the Federal State Property Management Agency Director Olga Dergunova told the press that the Russian government might sell its entire stake of 55.17% in Rostelecom as early as in 2013. While previously this month the same agency was inclined to postpone most of the big privatisation deals to 2014, “rushing” Rostelecom sale might be indeed related to upcoming merge with Tele 2 Russia.

VneshEkonomBank and other state agencies control 53.25% of the shares of Rostelecom, which in 2011 merged with Russia’s largest telecom holding Svyazinvest and the subsequent integration of 7 interregional fixed-line telecom providers controlled by Svyazinvest (CenterTelecom, North-Western Telecom, VolgaTelecom, Uralsvyazinform, SibirTelecom, Dagsvyazinform, and Dalsvyaz). The IFRS net profit of Rostelecom went down by 17% y/y in 2012 to RUB 35.24bn (USD 1.14bn). To compare, the IFRS net profit increased by 47% y/y in 2011 to RUB 46.1bn and by 22% y/y in H1/12 to RUB 23.4bn. In Q4/12 alone the net profit of Rostelecom dropped more than 3-fold y/y to RUB 4.6bn. Revenues in 2012 increased by 7% y/y to RUB 321.3bn, OIBDA inched up by 1% y/y to RUB 118.6bn at a margin of 36.9% vs. 395 in 2011. Capital expenditures increased by 10% y/y to RUB 91.2bn, net debt went up by 26% y/y to RUB 203bn. In 2012 Rostelecom announced extensive borrowing plans, including a tender won by VTB to open two renewable credit lines worth RUB 30bn each.  

Related Articles

IPO of Romanian telco RCS&RDS reportedly planned for May

A group of shareholders of Romanian diversified telecoms group RCS&RDS want to sell 20%-30% of the group’s shares in an IPO, Ziarul Financiar daily reported. The IPO is expected to take place ... more

Bulgaria’s Vivacom reportedly to buy minority stake in parent for €43mn

Bulgarian Telecommunications Company (BTC), the country’s largest telecom firm by revenue that operates under the brand name Vivacom, is reportedly planning to acquire a stake of between 10% and ... more

Romanian software producer Bitdefender takes over French peer Profil Technology

Romanian security technology company Bitdefender has acquired its French peer Profil Technology as part of its expansion strategy on the corporate segment.  The terms of the deal were not ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss