CTC Media to Sell 75 Percent Stake to UTH Russia

MOSCOW: Russia's CTC Media has agreed to sell a 75 percent interest in its operating businesses to UTV-Management, which is an affiliate of UTH Russia, for $200 million in cash.

The board of directors of CTC Media will recommend that the company’s stockholders approve the transaction at a special meeting to be convened as soon as possible. The transaction is expected to close in late December. MTG Russia, which holds approximately 38 percent of the company's common stock, has indicated that it is prepared to support the transaction based on the terms of the agreement with UTH and the ability of the company to return value to stockholders. Following the closing of the sale of the 75 percent interest to UTH, the board intends to return value in cash to the company’s stockholders (other than Telcrest, for so long as it remains subject to sanctions).

Werner Klatten, an independent member of the board of directors of CTC Media and chairman of the special committee of the board, commented: "We are pleased to have reached agreement with UTH on the proposed sale of a controlling interest in our operating businesses. This agreement represents a significant achievement in light of the extremely challenging environment in which the Company is operating in Russia and the pending effectiveness of the Mass Media Law. Although it is unfortunate that Russian law will require that we effect a sale of the operating businesses, we believe that UTH will be a good new owner of the business and will be well positioned to build on the historical success of CTC Media as the first and leading commercial broadcasting network in Russia."

Yuliana Slashcheva, the CEO of CTC Media, said: "The sale agreement will enable the management team to focus on the business, with the issue of compliance with the Mass Media Law resolved. We operate in a very challenging market environment, but I am confident that as part of UTH our operating businesses will remain strongly positioned to build on our historical achievements as we continue to set new standards in media entertainment across Russia and Kazakhstan."