OREANDA-NEWS. June 04, 2010. A board of directors meeting of Uralsvyazinform was held today at which issues were examined relating to the conduct of the annual general shareholders meeting which is scheduled for June 23, 2010 in Yekaterinburg.  Members of the board of directors unanimously voted to include in the agenda the reorganization of Uralsvayzinform with Rostelecom.  Shareholders recommended approving the Merger Agreement and the Act of Assignment.

As the chairman of the board of directors and general director of Svyazinvest Evgeny Yurchenko announced at the end of the meeting, the members of the board passed a motion to support the merger of Uralsvyazinform with Rostelecom after a detailed and comprehensive analysis of the materials.

All members of the board concurred with the opinion that the merger will be beneficial to shareholders since it will make it possible to speed up the development of the merged company’s business by pooling resources – technical, financial, investment, intellectual – and cutting costs.

The merger agreement contains the following conversion ratios for swapping the shares of Uralsvyazinform into those of Rostelecom:

87.341 authorized common shares of Uralsvyazinform with par value of RUR 0.12 are to be converted into one additional common share of Rostelecom with par value of RUR 0.0025 each.

111.602 authorized preferred shares of Uralsvyazinform with par value of RUR 0.12 are to be converted into one additional common share of Rostelecom with par value of RUR 0.0025 each.

Given that the shareholders who vote against the reorganization or abstain from the voting on the reorganization of Uralsvyazinform in accordance with the legislation of the Russian Federation will be entitled to demand a buyback of all or part of the shares which they own, the board of directors on the basis of a appraisal by Ernst & Young, approved the buyback price of shares from shareholders which present buyback demands as follows:

RUR 0.98 per one common nominal uncertified share;

RUR 0.98 per one preferred nominal uncertified share.

In addition, the annual financial statement, the annual accounting reports, including the income statement of the company and also allocation of profit for 2009 are to be approved by the annual general shareholders company.  The general shareholders meeting recommended that dividends be paid out on 2009 financial activities as follows:

RUR 0.051927 per common share (+51.9% compared to 2008) for preferred shares;

RUR 0.018897 per share (+51.9% compared to 2008) for common shares.

The total amount of dividend payments, if approved at the meeting, will be RUR 1,017.2 mln or 25% of the net profit of Uralsvyazinform’s Russian Accounting Standards for 2009.  A recommendation was made to allocate the remaining part of net (retained) profit for 2009 in the amount of RUR 3,051.7 mln to raise the company’s shareholder capital.

KPMG, which was earlier declared the winner of a tender to select the auditing firm, was appointed as the Uralsvyazinform’s 2010 auditor to perform a mandatory audit of the operator’s accounting records and financial statements according to International Financial Reporting Standards.

As reported earlier, the annual shareholders meeting of Uralsvyazinform is scheduled to be held on June 23, 2010 at the following address: Ul. Borisa Yeltsina d.8, Yekaterinburg, Russia, 620014 (Hyatt Regency Hotel, Yekaterinburg).  The record date for Uralsvyazinform’s annual general shareholders meeting is May 4, 2010.

AGENDA

1. Approval of the annual financial statement, the annual accounts reports, including the income statement (profit and loss accounts) of Uralsvyazinform based on the results of the 2009 financial year.

2. Allocation of profit (including payment of dividends) based on the results of the 2009 financial reporting year.

3. Election of members of the board of directors of Uralsvyazinform.

4. Election of members of the Audit Committee of Uralsvyazinform.

5. Reorganization of the company as a merger between Uralsvyazinform and ILD and DLD operator Rostelecom.

6. Making amendments to the Charter of Uralsvyazinform.

7. Making amendments to the Statute on the Board of Directors of Uralsvyazinform.

8. Approval of Uralsvyazinform’s 2010 audit firm.

9. Approval of the deduction standards (percentages) used to calculate the annual remuneration of members of the board of directors of Uralsvyazinform.

10. On the remuneration of members of the board of directors of Uralsvyazinform based on the results of 2009.  Determination of the amount and procedure for payment of remuneration for the results of 2009.

11. On terminating the participation of Uralsvyazinform in the Volga Association of Telecommunications and Data Processing Engineers Teleinfo.

12. On terminating the participation of Uralsvyazinform in the Volga Association for Quality Management of Telecommunications and Data Processing International Congress for the Quality of Telecommunications.

Further information (materials) to be presented for preparation of the annual general shareholders meeting will be available beginning on May 21, 2010 during work days from 8;30 am until 5:30 pm at the following addresses:

620014 Yekaterinburg, ul. Moskovskaya 11

620110 Yekaterinburg, ul. Lunacharskogo, 134b

640000 Kurgan, ul. Gogolya, 44

614096 Perm, ul. Lenina, 68

625000 Tyumen, ul. Respubliki 40 korp. 1

454000 Chelyabinsk, ul. Kirova, 161

628011 Khanty-Mansiisk, ul. Kominterna, 3

629008 Salekhard, ul. Matrosova, 2

109004 Moscow, ul. Nikoloyamskaya, 48, stroenie 2.