Bloomberg brought on Friday a Ceske radiokomunikace’s notification of an EGM, announced for April 8 (the record date is April 1). The EGM’s agenda includes:
* A reduction of the registered shareholder capital of Ceske radiokomunikace (from a CZK 100 per-share par value to CZK 1 per share).
* Payment of the reduction in shareholder capital (CZK 99 per share) to shareholders in the form of shares issued by Ceske radiokomunikace Limited (CRL, incorporated on the Cayman Islands, currently 100% owned by Ceske radiokomunikace).
* A transfer by Ceske radiokomunikace of its 39% stake in RadioMobil to CRL.
* Resolution on the approval of the agreement for the sale of RadioMobil shares (39%-owned by Ceske radiokomunikace) to “an investor.”
* Resolution on the approval of the agreement for the transfer of Contactel (50%-owned by Ceske radiokomunikace) to “an investor.”
* A vote on the division of Ceske radiokomunikace by an establishment of new companies and by merger.
A thorough assessment of the above is not possible given that few details are available. The sales of assets had been expected, and the proposed steps as such do not represent bad news for minority shareholders. Indeed, significant tax savings might result from the transactions (e.g., the elimination of income tax from capital gains from Radiomobil sale). However, Czech pension funds and certain other Czech investment funds are not allowed to hold the stock of companies that are not listed on the Prague Stock Exchange, which led to fears of a selling pressure on the stock for this reason (if the transactions are approved, most of the stock’s value would be transferred to the Cayman Islands-based CRL). This is at least one of the reasons why the stock lost 5.7% on Friday.
(Ondrej Datka)