CTC merger reorg moves forward following sale

CTC Media has received a licence from the US Treasury Department authorising it to proceed with its previously announced cash-out merger deal.

In a statement, the Russian broadcaster said that it is finalising preparations for the merger, and is awaiting the receipt of a tax refund from the US Internal Revenue Service, which will form part of the consideration to stockholders.

“Assuming receipt of this tax refund, the board currently anticipates that the company will complete the merger early in the second quarter of 2016,” said CTC Media.

The company completed the sale of a 75% interest in its Russian and Kazakh operating businesses to Russia’s UTV Management in December 2015.

In connection with this sale, CTC’s stockholders also approved the merger, which will see a wholly owned subsidiary of CTC merge with the surviving company.

“The company’s outstanding common stock as of the effective time of the merger, other than Telcrest [the holder of 25% of the Company’s outstanding shares], will be entitled to receive the per share cash consideration,” said CTC Media.

CTC Media agreed to sell the business last year in order to bring the company into compliance with the foreign ownership restrictions of the Russian Mass Media Law.

Russian president Vladimir Putin signed an amendment to the Russian law on mass media that will limit foreign ownership of media companies in Russia to 20%, down from the current limit of 50%, and came into effect on January 1, 2016.