MTG chiefs quit CTC Media board

Jørgen Madsen Lindemann

Modern Times Group’s CEO Jørgen Madsen Lindemann and CFO Mathias Hermansson have left the board of Russian commercial broadcaster CTC Media, as MTG mulls its options in Russia ahead of the imposition of new rules drastically restricting the scope of foreign ownership of media assets. Lindemann has additionally resigned as co-chairman of CTC.

MTG, as CTC’s largest shareholder, is entitled to name the holders of three seats on the company’s board. It has nominated Natasha Tsukanova, CEO of Moscow-based financial consultancy Xenon, and Kaj Gradevik, a former director of CTC Media and former vice-president and head of acquisitions at TeliaSonera, to sit alongside its third representative, MTG Russia chief Irina Gofman, on the board.

Both Tsukanova and Gradevik have top-level experience in mergers, acquisitions and disposals. Tsukanova has played an important role in structuring a large number of high-profile transactions in emerging markets,  notably in the energy sector, while Gradevik has worked in acquisitions for Merrill Lynch and advised on the sale of Tele2’s Norwegian operations to TeliaSonera and the the sale of Tele2 Russia to VTB Capital.

MTG said that it had established the process and appointed the adviser – UBS – to decide on the best way to comply with the amended Russian mass media law that requires it to restrict its stake in CTC to a maximum of 20%.

MTG this week denied suggestions in the Russian press that it was in talks to sell its stake in CTC to minority shareholder Telcrest.

Lindemann, said: “Now that the Board has established an ongoing process and put in place advisers to enable the Company to review and decide on its potential actions in order to comply with last year’s amendments to the Russian Mass Media Law, the time is right for us to designate members of the CTC Media Board who are specialists in corporate structuring and capital markets transactions. Natasha and Kaj will continue our work towards the best possible outcome for CTC Media’s stockholders, and Irina will continue to bring her considerable operational experience to bear on discussions with the Board and management.”

The changes come as CTC Media posted solid full-year results in what its management described as “a very challenging macroeconomic environment”. The group posted full-year revenues of  RUB27.3 billion (€396 million), up 3%, although revenues for the fourth quarter were flat at RUB8.5 billion. Adjusted OIBDA for the year was down 10% in ruble terms to RUB7.8 billion.

The group’s digital activities performed strongly, turning in 50% growth in revenue in the course of the year.

CEO Yuliana Slashcheva said that while CTC had outperformed the Russian market, challenges including the economic environment and the impact of a Russian government embargo on foreign food products as well as a weakening in the overall ad market had adversely affected its performance. The offset the impact, CTC has implemented a series of cost-cutting measures, including a potential substitution of Russian for international content.