NASDAQ and Euronext Amsterdam-listed telecoms group VEON yesterday completed the sale of its Russian mobile tower assets to Service-Telecom – an established partner of its Russian network operating division Beeline (PJSC VimpelCom) – for RUB70.65 billion (USD957 million). The deal was first announced on 6 September 2021 and has obtained all necessary regulatory approvals, enabling the 100% transfer of VEON’s National Tower Company (NTC) subsidiary, which operates a portfolio of approximately 15,400 towers in Russia. Beeline and Service-Telecom have also entered a ‘long-term master agreement’ regarding the provision of tower infrastructure services for an initial period of eight years, and multiple extensions of eight years at Beeline’s discretion. Both parties will additionally enter into a new build-to-suit programme comprising up to 5,000 sites by 2029.
The purchase price corresponds to an Enterprise Value/EBITDA multiple of 11.7x based on the projected EBITDA of NTC post-completion. VEON received a payment of RUB64.4 billion at closing with the balance of certain deferred amounts payable over the next three years. VEON will use the proceeds to reduce its group external debt.
VEON CEO Kaan Terzioglu said: ‘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 CEO Nikolay Berdin declared: ‘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.’