Svyazinvest (merged with Rostelecom #1305)

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OJSC Svyazinvest (Telecommunication Investment Joint Stock Company) was registered on Sptember 18, 1995, as a holding company for all assets the Russian Ministry of Communications possessed at the time in the field of telecommunications. In early 1993 the Russian telecommunications network consisted of some 85 regional communications companies, controlled entirely by the government. During 1993 local companies were reorganized as corporations and partially privatized through the national voucher program. A process of consolidation also started: Rostelecom became the single national fixed line operator, and 5 regional operators were created. The Ministry of Communications still held controlling stakes in all these companies. The stakes were consolidated in Svyazinvest in 1995. The role of Svyazinvest in the telecommunications sector was not clear up to 1998. The government intended to divest 49% of its shares in Svyazinvest through an international auction. The first attempt to sell an initial 25% of the Svyazinvest stakes was undertaken in 1995 and it turned into a failure. STET of Italy won the tender, but the deal came to an end due to disagreements over payment terms and the increased political turmoil in Russia. In July 1997, the government finally sold a 25% stake plus one share in Svyazinvest. A Cyprus-based consortium, Mustcom, won the tender. The consortium included Unexim Bank, ICFI Cyprus (Unexim MFK group), Renaissance International Ltd. (Renaissance Capital group), the Deutsche Morgan Grenfell investment bank, Morgan Stanley Asset Management, and the Quantum Fund of George Soros. The total divestiture revenue from the tender was $1.88 billion. That amount raised went almost entirely to the government budget; Svyazinvest retained only $95 million. By the end of 2002-2003 Svyazinvest completed the process of merging 74 regional fixed-line operators into seven large mega-regional companies where it held controlling voting stakes: Center Telecom, North-West Telecom, Volga Telecom, South Telecom, Uralsvyazinform, Siberia Telecom and Far East Telecom (Dalsvyaz). Svyazinvest also held 51% in the national long-distance carrier Rostelecom and six regional telecom operators that did not take part in the consolidation, including a 28% stake of the ordinary shares in Moscow City Telephone Network (MGTS) and industry institute Giprosvyaz. The total number of Svyazinvest’s subsidiaries and affiliates exceeds 730. Svyazinvest subsidiaries held licenses to provide local, long-distance and international telecommunications services, data transmission, internet access and wireless subscriber access services, and mobile services. As of 2006, the Russian state was the main shareholder of Svyazinvest through the Federal Property Agency (75% minus one share). JSC Comstar-UTS held 17.31% plus one share. MGTS FINANCE S.A. - 7.69%. In June 2008, Alexander Kiselyov, Svyazinvest's general director, said the company needs to be privatized no later than in the next 12 months. Comstar officials supported the plan and intended to take part in the process. In October 2010, Comstar-UTS, a subsidiary of AFK Sistema, sold its 25% + 1 share stake in Svyazinvest to Rostelecom for RUR 26 bln as part of an asset swap with AFK Sistema. In line with the deal, Svyazinvest received 100% of mobile operator Sky Link in exchange for a 23.3% stake in the voting shares of MGTS. In March 2012, Russian President Medvedev ordered Svyazinvest (the holding company) to merge with Rostelecom (a national operator) to eliminate the complicated cross-holding structure. Process-wise, 14.0547520661157 ordinary Svyazinvest shares were placed with a nominal value of RUB 1 each, and converted into one Rostelecom ordinary share with a nominal value of RUB 0.0025 each. The merger was completed by end 2013, resulting in Vnesheconombank and the Federal Property Management Agency jointly owning 51% of Rostelecom's shares. 2011 % private = 25% (Rostelecom's share in 2011) * 44% (the percentage private for Rostelecom in 2011) = Merged by end 2013 http://eng.svyazinvest.ru/ 20.06.2013 Svyazinvest holds EGM Press release Svyazinvest (hereinafter, the Company) on June 20, 2013 held an extraordinary general shareholders meeting, which passed a resolution supporting the reorganization of Svyazinvest through a merger with Rostelecom on the terms and conditions set forth in the Merger Agreement. The AGM approved this Agreement and also the Transfer Act.