Moscow. December 17. Shareholders “STS Media” has approved sale of 75% interest in the assets of the company holding UTH Russia, according to a press release, “CTC Media”, submitted to “Interfax” on Thursday.
“We are pleased to announce that shareholders approved the sale of 75% stake in the operating company’s assets before the entry into force of the amendments to the law “On mass media”, which includes restrictions on foreign ownership”, – stated in the message.
It notes that the shareholders also approved the reorganization of the company in the merger, which will “provide a refund to the shareholders subject to the receipt issued at the present time, the permission of the office of foreign assets control (OFAC) of the U.S. Treasury Department”.
“The sale of 75% stake was approved by 62.2% of the votes, the approval of the agreement and plan of reorganization in the form merger approved 54,39% of the vote,” the report States.
It is reported that the company expects “the deal with UTV will be closed December 21, 2015 or later”, and the merger in the first quarter of 2-16 years.
As previously reported, the deal will amount to a maximum of $200,5 million, the Buyer will pay $150,5 million, and the remaining $50 million will keep up to 1 February 2016 until estimated cash flows of CTC Media from operating and investment activities in the second half of 2015. If their size will be less than that provided by agreement of the parties, “UTV-Management” can reduce the size of the second tranche. The final price will also be adjusted for payments of CTC Media on reparation and compensation to third parties.
All proceeds from UTV will do most of CTC Media, who will direct them to buy back its shares from the Swedish Modern Times Group (MTG, owns 38.4 per cent) and minority shareholders (free float CTC Media – about 36%). CTC Media will also send cash to buyback its operating assets except for $15 million, which will remain with units of the media holding as working capital.
Thus the company will distribute among its shareholders a maximum of $255,6 million charge from UTV and its own cache. The payout per share will amount to $1.77 to $2,19 depending on the total amount of the deal with UTV. MTG shares and the minority shareholders will be expropriated and will leave CTC Media with Nasdaq by February 15, 2016.
“CTC investments” will also release in favor of “UTV-Management” additional share in the capital, with the result that she will increase ownership in the company to 80% from 75%. “UTV-Management” will pay for the share of 15-year-old bill at 10 billion roubles under 10% annual.
MTG proxy has already voted for the sale of assets and reorganization in form of merger, said CTC Media itself on Tuesday.
According to the results of the repurchase and redemption of shares of CTC Media, which will remain 20% “CTC, Invetsments”, will be 100% owned by Cyprus Telcrest Investments. The remaining 80% of “CTC invetsments the” get UTV. Shares of CTC Media owned by Telcrest, will not participate in the deal with UTV and will not be repaid.
Telcrest Investments, which owns a 25% stake in the media holding, will not be able to vote in the upcoming meeting, if you remain under U.S. sanctions. Owned shares of CTC Media, however, included in the calculation of the total number of votes. Telcrest was under sanctions in March 2014 due to the fact that the control of it belonged to the structures connected with Bank “Russia” Yuri Kovalchuk, caught in the sanctions list of the U.S. Treasury.
In September Telcrest has informed CTC Media that neither the Bank “Russia”, nor any other party not already own a controlling stake of the company now it has no majority shareholder. Now a Cyprus company owned by VTB – 30%, Alexey Mordashov – 29%, “Surgutneftegaz” – 9,53%, and the Bank “Russia”.
Changes in the shareholder Telcrest can contribute to the removal from it of sanctions, but to date the status of the package is not changed. Shares of CTC Media owned by Telcrest, will remain locked until a special decision of the office of foreign assets control (Office of Foreign Assets Control, OFAC) of the U.S. Treasury.
Sale of CTC Media were required to comply with the new law on mass media, limiting the share of foreign owners in Russian media at 20%. According to the law “On mass media”, the Russian beneficiaries Telcrest will be another year on the transfer of its ownership in the Russian jurisdiction.