Svyazinvest holds Board of Directors meeting

Svyazinvest (hereinafter, the Company) held a held a regular meeting of the Board of Directors on April 25, 2013 in Moscow.

The Board of Directors presented information on the results of work by Svyazinvest Group of companies for 2012. The board took this information under advisement.

The Board of Directors approved a purchase and sale agreement of securities between Svyazinvest and Mobitel under which the Company is purchasing from Mobitel 12,644,374 (twelve million six hundred forty four thousand three hundred and seventy four uncertificated nominal shares of Rostelecom.

The board determined, on the basis of market value, the price per one common nominal Rostelecom share which is to be purchased by the Company under the above-mentioned agreement in the amount of 136.05 (one hundred thirty six and 05/100) rubles. Thus, on the acquisition of 12,644,373 Rostelecom shares, Mobitel plans to pay RUR 1,720,267 which was received by the Company as a result of Rostelecom’s purchase last year of an additional issue of Svyazinvest shares. As a result of the deal between the Company and Mobitel the number of Rostelecom shares owned by Svyazinvest will increase from 1,332,911,894 to 1,345,556,268. The Company’s stake in Rostelecom common shares will go up from 45.29% to 45.72%. In addition, the Company’s stake in the charter capital of Rostelecom will rise from 41.84% to 42.23%.

The Board of Directors received information on cost cutting for the purchase of goods, works, and services per unit of production in real terms as of the end of 2012 compared to 2011. This indicator stood at 20.9% (vs. the target value of at least 10%).

The Board of Directors received information on the results of a public tender for the stipulation of an agreement to provide audit services for the purpose of conducting a mandatory RAS audit of Svyazinvest for 2013. The Board of Directors has proposed approving KPMG as the Company’s 2013 auditor.

The board approved a program for the sale of Svyazinvest non-core assets. The program for the sale of non-core assets was worked out based on the Company’s aims and types of activity and in accordance with the requirements of the current legislation of the Russian Federation, the Company charter, on the basis of a resolution passed by the Board of Directors of Svyazinvest dated November 22, 2012, and also letters of the Federal Property Management Agency: No. GN 15/10587 “On the execution of item 1 of Order No. Pr-3668 of the President of the Russian Federation dated December 6, 2011”; and No. GN-13/14903 “On the instructions of the Government of the Russian Federation of March 29, 2012 No. VP-p13-1770” for the purpose of selling the non-core assets of Svyazinvest. The program for sale of Svyazinvest non-core assets and provisions concerning its restructuring, determines the methods whereby these non-core assets are to be sold. The main purposes of the sale of non-core assets of Svyaznivest are to optimize holdings listed as the Company’s property and increase the efficiency of use of its assets that are not to be used in carrying out the main type of its activity and to attract additional financing.

The program for the sale of non-core assets, additions which are to be made to the program, and also information on its implementation are subject to posting on the intra-agency portal for management of state property in accordance with the procedure and the timeframe specified by the State Property Management Agency.

The Board of Directors also determined, on the basis of market value, the price of the Svyazinvest shares, for which buyback demands could be presented to the Company in the event of the reorganization of Svyazinvest, which is equal to RUR 9.68 per one common share. By law, shareholders of voting shares are entitled to demand the Company to buy back all or part of their shares in the event of reorganization of the Company if they vote against the decision to proceed with the reorganization or failed to adopt a decision on the reorganization because they did not take part in the voting on this issue.

Taking into account that under the existing structure of shareholder capital of Svyazinvest it is technically not to be ruled out that Rostelecom could be required to buy back the common shares which it holds in the Company, this issue was submitted for consideration by the Board of Directors.

In order to determine the buyback price of shares, the Company retained an independent appraiser – Ernst&Young Appraisal and Consulting Services – which determined the market value per one common nominal uncertificated share of Svyazinvest for the purpose determining the price at which shares are to be bought back from shareholders at RUR 9.68.

The Board of Directors considered the issue of amending the composition of the Management Board of the Company and passed a resolution to terminate the powers of the members of the Management Board of Svyazinvest Alexander Yurevich Provotorov and Denis Nikolaevich Afanasyev. The Board of Directors elected the Olga Grigorevna Koroleva and Ilya Nikolaevich Savelev as members of the Management Board of Svyazinvest.

The Board of Directors also considered other issues pertaining to the internal activity of the Company.

The following members attended the Board of Directors meeting:

• Alexander Alexandrovich Trubetskoy;
• Mikhail Mikhailovich Zadornov;
• Yury Alexandrovich Kudimov;
• Alexander Yurevich Provotorov;
• Ivan Ivanovich Rodionov;
• Vadim Viktorovich Semenov;
• Tomas Martin Khendel.