STS Media, Inc., the former single owner of STS Investments, announced that the rewards to the holders under a restructuring arrangement can come to USD2.05 per one share of stock, the company reported on May 4, 2016.
The funds that STS Media intends to pay out are expected to total USD239 million. The deal is scheduled to be closed in May 2016.
A 75-percent interest in the Russian operating business was sold for USD193.5 million in December 2015. The deal was prompted by the new regulations on the foreign participation in the Russian mass media. The special committee was formed in July 2015 to coordinate the terms of the assets sale.
On the day of the merger, the company is expected to keep USD54.7 million in free money flow. The reserve fund in the volume of USD8.8 million should be formed to cover the obligations in line with the new legal requirements.
Under the deal, STS Media would take over the subsidiary and form a single company. Each owner of common stock can receive a reimbursement for the shares of stock that are canceled. The stock of Telcrest will still remain in circulation to make that company the only holder of STS Media Inc. stock. The permission from the U.S. regulatory authorities for the transaction was received in February 2016.
STS Media was formed by P. Gervi, an American businessman. Apart from three TV channels, it owns several digital media-assets: videomore.ru, domashniy.ru, ctc.ru, peretz.ru. The company’s stock is traded on NASDAQ. Holders of stakes in STS Media are Modern Times Group MTG AB (37.9 percent) and Telcrest Investments Limited (25 percent). A total of 37.1 percent of the stock is in free float.
The nine-month 2015 net profit of STS (U.S. GAAP) rose nine percent to reach RUB3.501 billion from RUB3.214 billion. In dollar terms, the net profit increased 36 percent to USD57.3 million from USD89.5 million. Revenues declined 22 percent to RUB14.693 billion from RUB18.792 billion. Revenues in dollar terms went down 53 percent to USD248.7 million from USD529.1 million. The OIBDA (operating income before depreciation and amortization) dropped 70 percent to 1.647 billion roubles from 5.449 billion. In dollar terms, the OIBDA fell 82 percent to USD27.3 million from USD152 million.
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