Amsterdam, 6 September 2021 – VEON Ltd. (NASDAQ: VEON, Euronext Amsterdam: VEON), a leading global provider of connectivity and internet services, announced that it has reached agreement to sell its mobile network towers in Russia to Service-Telecom for a total
consideration of $970million. Service-Telecom is a well-known partner to PJSC
VimpelCom, which operates in Russia under the Beeline brand, and already
provides the company with passive infrastructure across various regions in
The sale reflects VEON’s continued focus on active portfolio management and
the pursuit of opportunities to realise the value of its infrastructure
portfolio. With over 50,000 towers across nine dynamic markets, it is one of
the industry’s largest.
The transaction involves the sale of 100 percent of National Tower Company
(“NTC”), a subsidiary of VEON, which operates a portfolio of approximately
15,400 mobile network towers in Russia. All of the active
mobile network infrastructure currently operated by PJSC VimpelCom and the
majority of the rooftop towers will remain with the company.
Under the terms of the deal, PJSC VimpelCom and Service-Telecom have entered
into a long-term master agreement regarding the provision of tower
infrastructure services for an initial period of 8 years, and multiple
extensions of 8 years at the discretion of PJSC VimpelCom. Both parties will
additionally enter into a new build-to-suit program comprising of up to 5,000
sites by 2029.
The master agreement provides a framework for a long-term strategic
partnership with Service-Telecom to pursue investments in network roll-out and
upgrade, and share the benefits from potential future infrastructure market
consolidation in Russia. The agreement also provides Beeline with strict
service commitments and protections enabling Beeline to place an even greater
focus on ongoing strategic initiatives and improve the quality of mobile
services for its customers.
The purchase price for the transaction of RUB70.65bn (USD970m equivalent)
corresponds to an EV/EBITDA multiple of 11.7x 2021 based on projected EBITDA of
The transaction is subject to customary regulatory approvals and closing is
expected to take place in the fourth quarter of 2021.
Commenting on the transaction, Kaan Terzioglu, VEON’s Chief Executive
Officer, said: “Today’s transaction is a major step forward in realising the
value of VEON’s infrastructure portfolio for our shareholders. By entering into
a long-term partnership with a strong, experienced counterparty in Russia,
Beeline will enjoy the operational and financial flexibility to serve its
customers with market-leading services through one of the nation’s largest and
most technologically-advanced mobile networks. Moreover, this transaction
allows to release the capital to deleverage VEON’s balance sheet and invest in
critical aspects of active network and digital opportunities while achieving
more financial flexibility.”
Service-Telecom CEO Nikolay Berdin noted: “The agreement reached with VEON
is a key achievement for Service-Telecom on its way to becoming a leading
telecommunication infrastructure operator in Russia. With PJSC VimpelCom as our
partner, we expect to drive sustainable long-term growth in Russia while
constructing the infrastructure backbone of the digital economy and helping to
enhance mobile broadband connectivity for consumers.”
This release contains “forward-looking statements”, as the phrase
is defined in Section 27A of the U.S. Securities Act of 1933, as amended, and
Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Forward-looking
statements are not historical facts, and include statements relating to, among
other things, expectations regarding the potential benefits of the transaction
described above. Forward-looking statements are inherently subject to risks and
uncertainties, many of which VEON cannot predict with accuracy and some of
which VEON might not even anticipate. The forward-looking statements contained
in this release speak only as of the date of this release. VEON does not
undertake to publicly update, except as required by U.S. federal securities
laws, any forward-looking statement to reflect events or circumstances after
such dates or to reflect the occurrence of unanticipated events. Furthermore,
elements of this release contain or may contain, “inside information” as
defined under the Market Abuse Regulation (EU) No. 596/2014.
VEON is a NASDAQ and Euronext Amsterdam-listed global provider of
connectivity and internet services.
For more information visit: www.veon.com.
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