OREANDA-NEWS. May 26, 2010. Southern Telecommunications Company (UTK) [(RTS: KUBN, KUBNP; МICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the largest fixed-line operator in the territory of the Southern and Northern Caucasian federal districts of Russia, hereby announces that today the Board of Directors of UTK approved the agenda for its annual general shareholders meeting, which is scheduled to take place on June 16, 2010.

The board of directors of UTK unanimously voted to include the reorganization of UTK in the form of a merger between UTK and Rostelecom on the agenda of the AGM, including the approval of the merger agreement between UTK and Rostelecom, which contains the swap ratios for converting the shares of UTK into those of Rostelecom, as follows:

-  19.378 common nominal non-certificated shares of UTK are to be converted into one common nominal non-certificated share of Rostelecom.

- 24.648 preferred nominal non-certificated shares of UTK are to be converted into one common nominal non-certificated share of Rostelecom.

The board of directors of UTK, based on market value, for the determination of which independent appraiser Ernst & Young was retained, approved the price of the buyback of shares from the company, given that buyback demands could be made against the company in the event of its reorganization.  The buyback price for common and preferred shares is the same and will amount to RUR 4.45 per one share.

The board of directors of UTK make the following recommendations to the annual general shareholders meeting:

1. to allocate the company’s profit on the results of the 2009 reporting year as follows:

- RUR 184,563,026.44 as dividend payout on class A preferred shares;

- RUR 276,837,567.26 as dividend payout on common shares;

- to raise the company’s authorized capital by RUR 1,384,257,383.30.

2. dividend payouts:

- RUR 0.18985 on one class A preferred share;

- RUR 0.09351 on one common share;

- in accordance with the procedure for allocating dividends payable to the company’s shareholders on record as of April 27, 2010.