Market Analysis

Board of Directors of OJSC Svyazinvest approved a plan to restructure the company Svyazinvest at its full-time meeting, held on October 20, 2009 in Moscow. The reorganization will take place in the form of accession interregional communication companies (MRK) to OJSC Rostelecom, said a press release, Svyazinvest.

It is expected that legal action to restructure the Group of Svyazinvest will be completed in May 2011. Assessment of the shares, obtaining corporate approvals, restructuring of debt and other procedures within the framework of accession to the MRC, Rostelecom is scheduled for 2010. It is assumed that the general meeting of shareholders of reorganized companies, which must be decided on accession will be held in the summer of 2010.

The merger of the Group companies of Svyazinvest of the OJSC Rostelecom will create a competitive integrated company providing a full range of services and data transmission in Russia, noted in a press release. Plans are to increase the liquidity of shares of the combined company, including through a listing on the Russian and foreign exchanges.

Association of Group companies of Svyazinvest will have a positive economic effect due to the realization of synergies in the area of cost optimization and revenue growth. Synergy, consultants estimated to exceed 30 billion rubles. It is expected that through the consolidation business credit ratings of the combined company will be higher than the current rating of MRK and Rostelecom.

At the time of reorganization and after the Group company Svyazinvest will pay special attention to the development of such business lines as broadband, mobile and IT-services.
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