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. Last Updated: 07/27/2016

Interros Reworks Media Empire

Prof-Media, part of tycoon Vladimir Potanin's Interros holding and one of the country's biggest media conglomerates, announced plans Thursday to move its subsidiaries to a single share, thus paving the way for a public offering.

Prof-Media controls national newspapers Izvestia and Komsomolskaya Pravda, sports daily Sovietsky Sport and tabloid Express-Gazeta, as well as FM radio stations Avtoradio, Energia and Novosti Online.

The holding also holds minority stakes in Expert business magazine and Prime-Tass news agency, but is looking to shed them, Prof-Media general director Vadim Goryainov told journalists Thursday.

The restructuring is likely to take about two years, Goryainov said. It was too early to say whether the public offering would be international or domestic, he added.

Potanin began buying up media stakes in 1997. The following year, Interros pooled the diverse stakes into Prof-Media, but never centralized finances for the separate media outlets.

The new structure will oversee all financial, production and distribution issues. Each media outlet will retain control over its editorial, advertising and promotion departments.

Prof-Media's radio stations will be moved into a radio holding, which in turn will be a subsidiary of the restructured holding.

With combined sales of about $90 million and net profit of $13.5 million in 2002, a restructured holding will be both more concentrated and more transparent, Goryainov said.

"The cash flow will be attractive not only to strategic investors, but also to portfolio investors," he said.

Goryainov said talks with investors in each of the media outlets about the size of their future stakes in the unified holding have begun positively and should be completed within six months.

Norwegian media group A-Pressen owns blocking stakes in Sovietsky Sport and Komsomolskaya Pravda. The group also holds majority stakes in four printing presses founded with Prof-Media.

Oil major LUKoil owns 49 percent of Izvestia. Individual shareholders own minority stakes in Komsomolskaya Pravda, Express-Gazeta and other outlets. Goryainov denied reports that LUKoil was opposed to the restructuring.

A-pressen was in favor of the restructuring from the outset, Goryainov said. Neither A-pressen nor LUKoil could be reached for comment Thursday.

It was not yet clear how talks about the share conversion will develop, Goryainov said.

A-pressen is asking for 25 percent plus one share of the new holding, LUKoil would like to get 10 percent and individual shareholders are eyeing 5 percent to 10 percent, he said.

Plans call for Prof-Media to move from the landmark Izvestia building on Pushkin Square to a new office building outside the city center.