Subsidiaries of Russia's state-controlled telecommuncations
holding Svyazinvest will spend $370 million to buy back shares from
350 executives holding options to sell, business daily Vedomosti
reports Thursday.
Svyazinvest plans to launch the sweeping repurchase and
redemption program by June 30, the newspaper quotes Chief Executive
Yevgeny Yurchenko as saying.
Next month, the company plans to choose a partner to manage a
new, closed-end fund whose assets will consist of eight regional
landline service providers that are being folded into industry
giant Rostelecom (RTKM.RS). These subsidiaries' newly consolidated
shares, both ordinary and preferred, will be sold to directors of
Svyazinvest, Rostelecom and the regional operators; department
heads; and managers who have helped prepare the holding's
reorganization. Shares in the new company will be reserved for them
to buy at a fixed price that will roughly correspond to the market
price, Yurchenko said.
All proceeds of the sale will go to the newly formed company,
said the CEO, who hopes managers choosing to sell and redeem shares
will be motivated to keep the new company's share price high.
A Svyazinvest director, Ivan Rodionov, said the board's
compensation committee hasn't yet considered whether to approve the
options-redemption program, Vedomosti says. The board early this
year authorized management to craft a stock-buyback program in
advance of Svyazinvest's reorganization, Yurchenko pointed out.
The number of shares in each subsidiary that can be redeemed
will be in proportion to the revenue it generates for Svyazinvest,
the CEO said. Once the Rostelecom-focused operations consolidation
and stock conversion are completed, the redemption-eligible shares
will account for 3.5% of the new company's stock.
Newspaper Web site: www.vedomosti.ru
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