Responding to new legislation that passed the first reading in the lower house of the Russian Parliament, the State Duma, earlier this week, Russia’s CTC Media said it is “monitoring these developments and evaluating their potential impact on the company and its stockholders.”
The new law, which is subject to two further two readings and then confirmation from the Federation Council and Russian Federation President, would mean that non-Russian companies can hold no more than 20% of domestic media companies – including TV broadcasters.
CTC Media is currently 38% owned by Modern Times Group, a Swedish listed company, and 25% owned by Telcrest Investments Limited, a Cypriot private limited company. The rest of the business is owned by a number of public stockholders, including US and European investors.
MTG said it is also closely monitoring the situation and “analysing what potential actions may be taken, in order to protect shareholders’ interests, in the event that the law is enacted. This applies both to the shareholding in CTC Media and MTG’s other TV and broadcasting business interests in Russia.”
If Russia’s new media law is approved, it will come into force on January 1, 2016 and will apply to both existing and future foreign ownership interests. Russian media firms would have until January 2017 to restructure and fall in line with regulations.
At the same time, CTC has elected MTG president and CEO Jørgen Madsen Lindemann as co-chairman of CTC Media, in place of Lorenzo Grabau, who is stepping down.
It has also appointed MTG’s chief financial officer Mathias Hermansson back to the CTC Media board as a director. He previously served as a member of the CTC board between December 2009 and April 2013.
Grabau is CEO of Investment Kinnevik, which is MTG’s founding and largest shareholder. He is stepping down from the CTC Media Board to focus his time on Kinnevik and its portfolio of listed and unlisted entities.