VEON Announces The Sale Of Its Russian Tower Assets For USD 970 Million
Transaction reflects a total enterprise value of RUB70.65bn (approximately USD970 million) and an EV/EBITDA multiple of 11.7x 2021E
PR NEWSWIRE3 HOURS AGO
AMSTERDAM, Sept. 6, 2021 /PRNewswire/ -- VEON Ltd. (VEON) - Get VEON Ltd. Sponsored ADR Report (Euronext Amsterdam: VEON), a leading global provider of connectivity and internet services, announces today that it has reached agreement to sell its mobile network towers in Russia to Service-Telecom for a total consideration of RUB70.65bn ( USD970million equivalent). 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 Russia.
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% 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 NTC post-completion.