Deutsche Bank, one of the globe's leading international banks and the Russian Direct Investment Fund, the Russian sovereign wealth fund, have agreed to make a joint investment in the largest telecommunications company in Russia, Rostelecom. A total of USD237.1 million on a parity basis would be invested in Rostelecom.

The proceeds of the capital infusion would be utilized for the further development and strengthening of Rostelecom's market position. The transaction had been approved by Rostelecom shareholders as well as the respective governing boards of RDIF and Deutsche Bank.

In consideration of the capital infusion, a total of 72,187,366 Rostelecom ordinary shares would be given by the Russian telecoms firm subsidiary MOBITEL. The deal also includes call and put options, where an increase in the share values would entitle Rostelecom a share of such accrued revenues. Also included in the agreement would be a clause to protect investors should the share prices decline. Finally, there is no assumption of physical settlement under the terms and conditions of the agreement.

According to Russian Direct Investment Fund CEO Kirill Dmitriev, "Sustained growth in the Russian economy means demand among consumers and businesses for reliable and ultra-fast broadband will continue to increase. It is therefore the right time to invest in the telecommunications sector. This deal capitalizes on the recent changes in Rostelecom's corporate governance and development strategies and will be another important step in realizing Russia's infrastructure potential."