Rostelecom Group (MOEX: RTKM, RTKMP; OTCQX: ROSYY), the largest integrated digital service provider in Russia, has today signed legally binding agreements to acquire 50.1% LUKOIL INFORM, the telecommunication business of LUKOIL, the parties informed.
Under the agreements, at the time of signing, Rostelecom will acquire 50.1% shares in the company, with call/put options to increase Rostelecom's participation to 100% in 2023. The total deal value will depend on LUKOIL-INFORM's financial performance and will amount to no less than RUB 2 billion, including the exercising of the call/put options, the statement notes.
LUKOIL-INFORM operates the telecommunication infrastructure for oil and gas exploration, production, processing, marketing and distribution across all LUKOIL's branches in 53 regions in Russia. In line with the agreement, LUKOIL will retain the existing contractual commitments for LUKOIL-INFORM over the next five years. The deal will further solidify Rostelecom's B2B offering through the formation of a competence center for digital development in oil and gas sector. This in turn will open up further opportunities to promote Rostelecom's comprehensive digital services across LUKOIL's wider corporate footprint.
PJSC Rostelecom (tax number: 7707049388) is the national long-distance communication operator leading in the amount of long-distance domestic and international data traffic and operating the land-line network of television and broadcasting channels. In April 2011, Rostelecom absorbed interregional communication companies Centertelecom, Sibirtelecom, Dalsvyaz, Uralsvyazinform, VolgaTelecom, SZT, YTK and Dagsvyazinform. Total length of Rostelecom's backbone network all over Russia is about 500,000 km. The company's infrastructure reaches 43 million Russian households.
The company's authorized capital is RUB 6.961 billion. It consists of 2,784,480,101 shares including 2,574,914,954 common shares and 209,565,147 type A preferred shares. Rostelecom's major shareholder is the Government of Russia. The company's securities are listed on the MICEX Stock Exchange in Russia as well as in the electronic OTC trading system OTCQX in the USA.
IFRS net profit of PJSC Rostelecom for 2019 increased by 10% to RUB 16.474 billion from RUB 15.012 billion a year earlier. Revenue increased by 5% to RUB 337.421 billion from RUB320.239 billion, OIBDA went up 6% to RUB 106.526 billion from RUB 100.9 billion.
PJSC LUKOIL (tax number: 7708004767) is Russia's second largest oil producer. The largest block of the company's shares is owned by its management. IFRS net profit of LUKOIL for 2019 attributable to the company's shareholders increased by 3.4% to RUB 640.2 billion from RUB 619.2 billion a year earlier. The company's sales revenue for 2019 decreased by 2.4% year-on-year to RUB 7.841 trillion from RUB 8.036 trillion.
