Transaction paves the way to long term partnership beween the seller and buyer.
VEON has concluded the transaction for the sale of its Russian tower assets to Service-Telecom. It announced the deal in early September and has now secured the necessary regulatory approvals.
The transaction involves the sale of 100% of the National Tower Company (NTC), a VEON subsidiary which operates about 15,400 mobile network towers in Russia.
The purchase price is RUB70.65 billion (€842 million) – a multiple of 11 times the projected EBITDA for the National Tower Company after completion.
VEON has received a payment of RUB64.4 billion at closing and the balance of certain deferred amounts will be due and payable over the next three years. The proceeds from this transaction will be used to reduce the Group's external debt.
VEON said the conclusion of this transaction paves the way a long-term partnership "pursuant to a master tower agreement that has been entered into between PJSC Vimpelcom and Service-Telecom".
Kaan Terzioglu, VEON’s CEO, said, “I am encouraged by the successful conclusion of this transaction and look forward to building our partnership with Service-Telecom.
"This transaction unlocks the value of our infrastructure assets in Russia and allows the release of capital to further optimise VEON’s balance sheet while at the same time achieving more financial flexibility for the group”.
Service-Telecom's CEO, Nikolay Berdin, noted, “Following a highly competitive tender process, we completed this historical, first-ever, tower transaction in the Russian market. This highlighted the financial capabilities of the group and demonstrated the expertise of the Service-Telecom team both in its ability to manage the tower business and M&A.
"By entering this transaction with VimpelCom, we'll continue to successfully run the business to develop a national mobile network infrastructure that matches the country's ambitions.”