Moscow. December 18. Shareholders of CTC Media Inc at the meeting on 17 December approved the sale of 75% shares of LLC “STS investments” (unites operational business CTC Media) companies “UTV Management” (structure of UTH Russia holding of Alisher Usmanov and Ivan Tavrina) and the issuance of additional shares in “CCC S. A.” in favor of “UTV Management”.
Voted 62,66% of the shareholders, stated in the message of the American company.
On the date of closure of the register of shareholders for participation in the meeting (16 November) were in circulation 103,854 million 156 thousand shares of CTC Media, in voting at the EGM was attended by the holders of 98 million 165,759 thousand shares (62,88% of the vote).
The shareholders also approved the agreement and plan of reorganization in the form of a merger of CTC Media CTCM Merger Sub, Inc. (the reorganization will allow you to transfer funds to the shareholders), voted 54,39% of meeting participants.
Furthermore, 59.5 per cent of shareholders (92 million 936,347 thousand votes) had voted for remuneration to the management of CTC Media in connection with the transaction (the vote were Advisory, non-binding).
“Currently, the company expects that the deal with UTV will be closed December 21, 2015 or a bit later”, – stated in the message. The merger is scheduled for completion in the first quarter of 2016. CTC Media also announced that it will have to obtain permission from the office of foreign assets control (OFAC) of the U.S. Treasury Department.
The Assembly was attended by shareholders who owned shares of CTC Media as of 16 November. For a quorum was a simple majority of votes for decision making – support of the majority of shareholders.
The largest shareholder in CTC Media – the Swedish Modern Times Group (37.9 percent) – before the proxy has already voted for the sale of assets and the organization in the form of a merger, reported SPC.
Cyprus Telcrest Investments Ltd., owning 25% of shares holding, did not participate in the vote due to the fact that it is under U.S. sanctions. Owned shares of CTC Media, however, included in the calculation of the total number of votes.
The Board of Directors of CTC Media has approved the final terms of the deal with UTV on 21 October. In December the deal was approved by the government Commission on foreign investment.
UTV will pay for the assets of CTC Media to a maximum of $200,5 million: $150,5 million will be paid out by December 21, and the remaining $50 million UTV will keep until February 1, 2016 – until you have counted the 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 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 MTG 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 shall 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 the UTV additional stake in equity, resulting in a UTV will be able to increase ownership in the company to 80% from 75%.
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.
CTC Media manages broadcasting of the Russian channels CTC, “Home” and “Che” (formerly “Pepper”), owns media assets in Kazakhstan and Moldova. In April 2014, the company launched a new channel STS Love in cable and satellite networks.
In III quarter 2015 revenues of CTC Media fell by 15% to 4,927 billion (51%, to $77,2 million). OIBDA decreased by 69% to 569,7 million (or 84%, to $8.3 million), the profitability of this indicator was 11.6% against 32,3% in the previous year.
UTV holding was established on the basis of media assets Tavrina and Usmanov. The company owns a broadcasting channel “s” and non-terrestrial “Muz-TV”, as well as stakes in broadcasting the Disney channel.