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ROSTELECOM PJSC (RKMD)

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Monday 30 November, 2020

ROSTELECOM PJSC

Rostelecom acquires a leading e-waste management developer

ROSTELECOM PJSC (RKMD)
ROSTELECOM PJSC: Rostelecom acquires a leading e-waste management developer

30-Nov-2020 / 12:40 MSK
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.


Rostelecom acquires a leading e-waste management developer

Moscow, Russia - November 30, 2020 - Rostelecom group (MOEX: RTKM, RTKMP; OTCQX: ROSYY), the largest integrated digital service provider in Russia, today announces that it has acquired 1% shares of Big3, a developer and provider of complex IT systems for waste and environmental management. The group has also signed a call-option agreement to increase Rostelecom's participation to 51%, subject to exercising in H1 2021. The total value of the deal stands at RUB 1.275 billion, including call option exercise.

The acquisition will strengthen Rostelecom's leading position in the e-waste management market, which is projected to reach over RUB 20 billion within five coming years. Big3 will join Rostelecom as a subsidiary company, while retaining key staff and competencies.

Big3 is a Russian IT company and software developer aiming at facilitating ecology issues. A leader in the digitalisation of waste and environmental management and software e-waste market, the Company's products have been already implemented in over 60 regions. Big3 ensures fully automatization and digitalisation of business process across regional waste operators while their solutions can model the industry operations both at a level of particular territory as well as at a nationwide scale. The Company's 2020 revenues are expected to reach RUB 1 billion.

Anna Shumeiko, Senior Vice-President, the Chief of Staff of the President of Rostelecom commented: "The acquisition of Big3 is a strategic milestone for Rostelecom in the establishment of a new highly perspective business cluster, which can be easily compared to such cornerstone businesses  as cyber security and cloud. Waste management and environmental responsibility as a whole are becoming incredibly important for companies in every sector and government authorities at the federal and regional levels. The significant investment in the development of IT systems in this space within the national Project "Ecology", recently launched by the Russian Government, opens significant opportunities leveraging Big3's competencies and digital solutions. This is especially relevant to expanding and complementing our range of services given that a large number of Rostelecom's clients are deeply involved in the smart city and smart region projects where the nationwide scale of our operations makes us an undisputable leader."

Igor Zimin, Vice President for Applied Projects at Rostelecom, commented: "The Big3 acquisition presents a new highly prospective source of growth, offering the potential to increase the scale of our digital offering, complemented by complex IT systems for environmental management. We have already started to mature some opportunities to expand this new cluster, and have been focusing in particular on the ways of digitising the management of medical waste which presents epidemiological danger. In light of the COVID-19 pandemics, the amount of PPE waste including facemasks and single-use gloves that need to be sterilised, disinfected or recycled, has increased substantially, and it is crucial to ensure that reliable control measures and management tools and systems are in place. This process can be significantly advanced and improved in efficiency with the use of Rostelecom's digital solutions."

Further information is available at https://www.company.rt.ru/en/ir/news_calendar/.

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Rostelecom is the largest integrated digital services and products provider, operating in all segments of the telecommunications market in Russia. The Company serves millions of households, state and private enterprises across the country.

Rostelecom is Russia's undisputed market leader, providing high-speed Internet access and pay-TV. The total number of broadband users stands at over 13.4 mln users, it has more than 10.7 mln pay-TV customers, over 5.8 mln of which are subscribed to Rostelecom's IPTV services. Tele2 Russia, a Rostelecom subsidiary, is a major player in the mobile market with over 44 mln subscribers and the industry-leading NPS, a customer satisfaction benchmark.

The Group is the leading provider of telecommunications services to government bodies and corporates of all levels.

Rostelecom is a key strategic innovator that provides solutions in the following fields: E-Government, cybersecurity, data-centers and cloud computing, biometry, healthcare, education and housing & utility services.

* * *

Certain statements in this press release are forward-looking statements within the meaning of the U.S. federal securities laws and intended to be covered by the safe harbours created thereby.

Those forward-looking statements include, but are not limited to:

  • Assessment of PAO Rostelecom's (the Company) future operating and financial results as well as forecasts of the present value of future cash flows and related factors;
  • The Company's plans to take ownership stakes in other organisations;
  • the Company's anticipated capital expenditures and plans to construct and modernize its network;
  • the Company's expectations as to the growth in demand for its services, plans relating to the expansion of the range of its services and their pricing;
  • the Company's plans with respect to improving its corporate governance practices;
  • the Company's expectations as to its position in the telecommunications market and forecasts on the development of the market segments within which the Company operates;
  • economic outlook and industry trends;
  • the Company's expectations as to the regulation of the Russian telecommunications industry and assessment of impact of regulatory initiatives on the Company's activity;
  • other statements regarding matters that are not historical facts.

 

Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include:

  • risks relating to changes in political, economic and social conditions in Russia as well as changes in global economic conditions;
  • risks relating to Russian legislation, regulation and taxation, including laws, regulations, decrees and decisions governing the Russian telecommunications industry, securities industry as well as currency and exchange controls relating to Russian entities and their official interpretation by regulatory bodies;
  • risks relating to the Company, including the achievement of the anticipated results, levels of profitability and growth, ability to create and meet demand for the Company's services including their promotions, and the ability of the Company to remain competitive in a liberalized telecommunications market;
  • technological risks associated with the functioning and development of the telecommunications infrastructure, technological innovations as well as the convergence of technologies;
  • other risks and uncertainties. For a more detailed discussion of these and other factors, see the Company's Annual Report and the Company's other public filings.

Many of these factors are beyond the Company's ability to control or predict. Given these and other uncertainties, readers are cautioned not to place undue reliance on any of the forward-looking statements contained herein or otherwise. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements (which are made as of the date hereof) to reflect events or circumstances upon the annual report publication or to reflect the occurrence of unanticipated events, except as may be required under applicable laws.

 



ISIN: US7785291078
Category Code: ACQ
TIDM: RKMD
LEI Code: 2534001D752JPNM0H170
Sequence No.: 88754
EQS News ID: 1151438

 
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