Thursday, September 29, 2022
Published 1 Year Ago on Monday, Sep 13 2021 By Inside Telecom Staff
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 totalconsideration of $970million. Service-Telecom is a well-known partner to PJSCVimpelCom, which operates in Russia under the Beeline brand, and alreadyprovides the company with passive infrastructure across various regions inRussia.
The sale reflects VEON’s continued focus on active portfolio management andthe pursuit of opportunities to realise the value of its infrastructureportfolio. With over 50,000 towers across nine dynamic markets, it is one ofthe 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 approximately15,400 mobile network towers in Russia. All of the activemobile network infrastructure currently operated by PJSC VimpelCom and themajority of the rooftop towers will remain with the company.
Under the terms of the deal, PJSC VimpelCom and Service-Telecom have enteredinto a long-term master agreement regarding the provision of towerinfrastructure services for an initial period of 8 years, and multipleextensions of 8 years at the discretion of PJSC VimpelCom. Both parties willadditionally enter into a new build-to-suit program comprising of up to 5,000sites by 2029.
The master agreement provides a framework for a long-term strategicpartnership with Service-Telecom to pursue investments in network roll-out andupgrade, and share the benefits from potential future infrastructure marketconsolidation in Russia. The agreement also provides Beeline with strictservice commitments and protections enabling Beeline to place an even greaterfocus on ongoing strategic initiatives and improve the quality of mobileservices 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 ofNTC post-completion.
The transaction is subject to customary regulatory approvals and closing isexpected to take place in the fourth quarter of 2021.
Commenting on the transaction, Kaan Terzioglu, VEON’s Chief ExecutiveOfficer, said: “Today’s transaction is a major step forward in realising thevalue of VEON’s infrastructure portfolio for our shareholders. By entering intoa long-term partnership with a strong, experienced counterparty in Russia,Beeline will enjoy the operational and financial flexibility to serve itscustomers with market-leading services through one of the nation’s largest andmost technologically-advanced mobile networks. Moreover, this transactionallows to release the capital to deleverage VEON’s balance sheet and invest incritical aspects of active network and digital opportunities while achievingmore financial flexibility.”
Service-Telecom CEO Nikolay Berdin noted: “The agreement reached with VEONis a key achievement for Service-Telecom on its way to becoming a leadingtelecommunication infrastructure operator in Russia. With PJSC VimpelCom as ourpartner, we expect to drive sustainable long-term growth in Russia whileconstructing the infrastructure backbone of the digital economy and helping toenhance mobile broadband connectivity for consumers.”
This release contains “forward-looking statements”, as the phraseis defined in Section 27A of the U.S. Securities Act of 1933, as amended, andSection 21E of the U.S. Securities Exchange Act of 1934, as amended. Forward-lookingstatements are not historical facts, and include statements relating to, amongother things, expectations regarding the potential benefits of the transactiondescribed above. Forward-looking statements are inherently subject to risks anduncertainties, many of which VEON cannot predict with accuracy and some ofwhich VEON might not even anticipate. The forward-looking statements containedin this release speak only as of the date of this release. VEON does notundertake to publicly update, except as required by U.S. federal securitieslaws, any forward-looking statement to reflect events or circumstances aftersuch dates or to reflect the occurrence of unanticipated events. Furthermore,elements of this release contain or may contain, “inside information” asdefined under the Market Abuse Regulation (EU) No. 596/2014.
VEON is a NASDAQ and Euronext Amsterdam-listed global provider ofconnectivity and internet services.
For more information visit: www.veon.com.
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