Rostelecom closes the deal to consolidate 100% of Tele2 Russia

Moscow, Russia – March 17, 2020 – Rostelecom PJSC (MOEX - RTS: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, announces closing of the transaction to acquire 55% of T2 RTK Holding OJSC (Tele 2 Russia). The deal saw Rostelecom finalize the consolidation of 100% of Tele2 Russia and VTB bank with a consortium of investors becoming owners of 29.4% ordinary shares in Rostelecom.

In line with the agreed deal structure[1], approved by Board of Directors, Rostelecom has finalized the settlements with VTB Bank and its partners to acquire the remaining 55% shares in Tele 2 Russia, including:

• A sale purchase agreement relating to the acquisition of a 45% stake in Tele2 Russia’s charter capital. The transaction has a value of RUB 108 billion;
• A barter agreement to acquire a 10% stake in Tele2 Russia through the exchange of 10% of ordinary Rostelecom shares[2] held by MOBITEL (Rostelecom subsidiary). The transaction has a value of RUB 24 billion;

The deal was partly financed through equity raise of RUB 66 billion, resourced from the additional share issue and private subscription of Rostelecom ordinary shares awarded to VTB bank.

As a result of this additional share issue, the number of ordinary shares in Rostelecom’s charter capital has increased by 708, 082, 975 shares to 3,282,997,929 shares (including shares acquired in-line with preemptive rights). On 16 March 2020, Central Bank of Russia registered the Report on Rostelecom’s additional ordinary share issue.

Anna Shumeiko, Senior Vice-President, the Chief of Staff of the President of Rostelecom:

“Tele 2 Russia consolidation is a historic moment for the Russian telecommunications market and pivotal for Rostelecom. The largest transaction of the recent years will enhance Rostelecom’s leading position in the digital service market, adding to the Company’s financial and business resilience and long-term sustainability. In the near future, we will be updating our key strategic priorities with an ultimate goal to increase Rostelecom’s fundamental value through providing cutting edge digital services to Russian households, business and state. We are also excited to see VTB and its partners become our long-term strategic shareholders whose motivation matches our aim to increase capitalization”.

Further information is available at https://www.company.rt.ru/en/ir/news_calendar/.