MegaFon shows interest in Ukrtelecom, as fears grow for privatisation

22 Apr 2008

Sergey Soldatenkov, Director General of MegaFon, has announced that his company might be interested in the upcoming privatisation of Ukrtelecom. Soldatenkov told journalists that the decision to take part in the auction for a majority stake in Ukraine’s national PTO had not been made yet, but that the Russian cellco saw it as an interesting opportunity, because of Ukrtelecom’s monopoly on its domestic 3G mobile market. MegaFon, whose largest shareholder is Sweden-based TeliaSonera (35.6%), joins a growing list of possible suitors for the telco which includes Russia’s largest cellco by subscribers Mobile TeleSystems (MTS). The Ukrainian government intends to sell a controlling 67.8% stake in Ukrtelecom to a strategic investor at a minimum price of USD2.4 billion, whilst retaining a ‘blocking’ shareholding of 25% plus one share. However, there are worries that Ukraine’s President Yushchenko might suspend the privatisation, after he cancelled by decree the planned sell-off of chemical giant Odessa Portside Plant earlier this month, along with tenders for several other smaller state assets in the energy sector. The government of Prime Minister Yulia Timoshenko, who was elected in December 2007, is attempting to steamroller ahead with sales of national companies to reduce public debt which stood at USD17.6 billion at the end of 2007, according to TeleGeography’s GlobalComms database. Incoming Finance Minister Viktor Pynzenyk said early this year that the new administration would comfortably exceed a privatisation target of USD1.6 billion in its annual budget, but the wheels of the programme are now in danger of falling off as Timoshenko and Yushchenko clash in the media.

Ukraine, MegaFon, Ukrtelecom (incl. TriMob)