Russia's MTS proposes discounted buyback for foreigners' stranded shares

MOSCOW (Reuters) - Russia's largest mobile operator nS8N3EZ0BL proposed a share buyback to foreign shareholders at a discount of around 69% on Saturday, giving Western investors whose securities are blocked in Russia the chance to recoup some stranded funds.

MTS has launched a tender offer to purchase up to 83,932,026 shares and plans to spend up to 7.97 billion roubles of its own funds to finance the share acquisition, MTS said.

The purchase price was set at 95 roubles per share, which was 69% lower than yesterday's closing price on the Moscow Exchange.

Buyback parameters had been already approved by a Russian government commission. The deadline for shareholders to accept the offer is midday, Moscow time, on May 28 2024.

The offer is aimed primarily at non-resident shareholders who are currently unable to buy or sell the company’s shares, MTS said.

"The share buyback will be financed by MTS's own funds and will not affect MTS's dividend policy or plans to pay out dividends," the company said.

The proposal mirrors one made by retailer Magnit in 2023, which saw it successfully complete a buyback worth around $736 million. The Kremlin demands a discount of at least 50% on any asset sales involving foreigners.

Magnit's offer represented the first opportunity for non-resident shareholders of a Russian public company to dispose of their shareholdings with settlement in different currencies since the West imposed sweeping sanctions over the war in Ukraine and subsequent Russian countermeasures restricted the flow of capital.

(Reporting by Alexander Marrow and Gleb Stolyarov; Editing by Andrew Osborn)