OREANDA-NEWS. Rostelecom, Russia's national telecommunications operator, today announced that its Board of Directors has approved the decision to increase the Company's share capital through the issue of an additional 1,582,234,000 ordinary shares[1]. The decision was taken at a meeting of the Board of Directors, held on August 5th, 2013.

As a result of the second stage of the reorganisation 1,071,502,300 of the newly issued shares are planned to be placed in favour of Rosimuschestvo, a major Svyazinvest shareholder. The remaining shares will only be technically issued and will be cancelled in-line with legal requirements.

Once the reorganisation is complete, Rostelecom's share capital structure is expected to be divided into 2,669,204,301 issued ordinary shares and 242,831,469 issued preferred shares (following the cancellation of 1,345,556,268 ordinary shares currently held by Svyazinvest).

The additional share issue is being conducted to facilitate the merger of Svyazinvest and 20 other affiliate companies[2] with Rostelecom, which has been designed to eliminate the cross-ownership between Rostelecom and Svyazinvest.

[1] Current structure of Rostelecom share capital: 2,943,258,269 issued ordinary shares, 242,831,469 issued preferred shares

[2] National Telecommunications OJSC, National Cable Networks OJSC, St. Petersburg Cable Television Company OJSC, ELKATEL CJSC, National Cable Networks - EuroAsia OJSC, Novosibirsk Antenna Cable Television Broadcasting CJSC, Teleset-Service CJSC, ELTELEKOR CJSC, Mosteleset OJSC, Mostelecom OJSC, TELESET CJSC, TELESET INVEST CJSC, TNPKO OJSC, Simbirsky Telecommunications Systems CJSC, Svyazinvest CJSC, Russian Telecommunications Network OJSC, Novgorod Datacom CJSC, Parma-Inform CJSC, ENTER CJSC and Ingushelektrosvyaz OJSC.