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CTC Media, Inc.
, Russia's leading independent media company, notes
that the amendments to the Russian law "On Mass Media" have now been signed by
the President of the Russian Federation and thereby become law. As previously
announced, the amendments impose further restrictions on foreign ownership of
mass media (including television broadcasters) in Russia.
The amendments reduce the permitted level of aggregate foreign ownership of
Russian mass media from 50% direct ownership to 20% direct or indirect
ownership or control. The legislation applies to both existing and future
foreign ownership, and will come into force on January 1, 2016. The amended
law will affect CTC Media itself, as a Delaware corporation that directly or
indirectly owns 100% of the shares of a series of Russian legal entities that
operate primarily broadcast media entertainment businesses in Russia and the
CIS, and then the non-Russian stockholders of the US holding company. Russian
beneficial owners holding through off-shore holding structures will have until
January 1, 2017 to comply with the law.
CTC Media's Board of Directors has formed an advisory committee consisting of
non-executive Directors, which is in the process of appointing international
and local financial and legal advisers, and evaluating the potential actions
that the Company may take moving forward in order to comply with the amended
law. These actions may include corporate restructuring, franchising and
licensing structures, capital reorganization or divestments. CTC Media is also
in dialogue with other media companies that are affected by this change in the
law.
"While these new legal requirements are not expected to directly adversely
affect our operating business, they do have significant implications for the
ownership structure of our Russian operating business by our American parent
company and its international stockholders," commented Yuliana Slashcheva, CEO
of CTC Media. "We are analyzing our alternative courses of action in these
circumstances, in order to comply with the law and best protect the interests
of our stockholders."
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