Leading Russian Television Broadcaster in $346 Million IPO

Cleary Gottlieb was U.S. and Russian counsel to the underwriters, led by Morgan Stanley & Co. Incorporated and Deutsche Bank Securities Inc., in the $346 million IPO of 27,180,328 shares of common stock in CTC Media, Inc. on NASDAQ, including an over-allotment option exercised by the underwriters shortly after pricing. The offering consisted of 7,909,748 shares issued and sold by the company and 19,270,580 shares sold by selling shareholders, including affiliates of Alfa Bank, funds managed by Baring Vostok Capital Partners and current and former management. The shares offered in the IPO represented approximately 18% of CTC Media’s outstanding common stock. The IPO is the second on NASDAQ by a business operating primarily in Russia and the first equity offering by a Russian broadcaster.

CTC Media is the Delaware holding company for the Russian television group that owns and operates the CTC and Domashny networks. The CTC network is the leading non-state controlled television network in Russia, and broadcasts entertainment programming targeted at 6-54 year-old viewers, while Domashny (“Home”) is principally targeted at 25-60 year-old female viewers. CTC’s signal is carried by more than 300 television stations and local cable operators in Russia, including 16 owned-and-operated stations, and Domashny’s signal is carried by approximately 100 television stations and local cable operators in Russia, including four owned-and-operated stations. CTC Media will use the proceeds of the offering to implement its growth strategy, to repay outstanding indebtedness and for general corporate purposes.

This is the second U.S. IPO by a Russian business with a U.S.-incorporated holding company. The IPO is also only the fifth IPO by a Russian business on a U.S. stock exchange since the Russian economic crisis in 1998 (Cleary Gottlieb has represented the underwriters on four of these). Cleary Gottlieb previously represented the underwriters in the IPO and listing on the New York Stock Exchange of ADRs representing ordinary shares in OJSC Mobile Telesystems in 2000, OJSC Wimm-Bill-Dann Foods in 2002 and OJSC Mechel Steel Group in 2004.