AMSTERDAM, September 6, 2021 / PRNewswire / – VEON Ltd. (NASDAQ: VEON) (Euronext Amsterdam: VEON), a leading global provider of connectivity and Internet services, today announced that it has reached an agreement to sell its mobile network towers to Russia to Service-Telecom for full consideration of 70.65 billion rubles (970 million USD equivalent). Service-Telecom is a well-known partner of PJSC VimpelCom, which operates in Russia under the Beeline brand, and already provides the company with passive infrastructure in various regions of Russia.
The sale reflects VEON’s continued focus on active portfolio management and seeking opportunities to realize the value of its infrastructure portfolio. With more than 50,000 towers in nine dynamic markets, it is one of the largest in the industry.
The transaction includes 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 active mobile network infrastructure currently operated by PJSC VimpelCom and the majority of rooftop towers will remain with the company.
Under the terms of the agreement, PJSC VimpelCom and Service-Telecom have entered into a long-term framework agreement for the provision of tower infrastructure services for an initial period of 8 years, and multiple 8-year extensions at the discretion. by PJSC VimpelCom. The two sides will also enter into a new bespoke construction program comprising up to 5,000 sites by 2029.
The framework agreement provides a framework for a long-term strategic partnership with Service-Telecom to continue investments in network deployment and upgrading, and to share the benefits of a potential future consolidation of the infrastructure market in Russia. The agreement also provides Beeline with strict service commitments and protections allowing Beeline to focus even more on ongoing strategic initiatives and improve the quality of mobile services for its customers.
The purchase price of the transaction 70.65 billion rubles (970 million USD equivalent) corresponds to an EV / EBITDA multiple of 11.7x 2021 based on NTC’s forecast post-completion EBITDA.
The transaction is subject to customary regulatory approvals and is expected to close in the fourth quarter of 2021.
Commenting on the transaction, Kaan Terzioglu, CEO of VEON, said: “Today’s transaction is a major milestone in realizing the value of VEON’s infrastructure portfolio for our shareholders. By entering into a long-term partnership with a solid and experienced counterparty in Russia, Beeline will benefit from the operational and financial flexibility necessary to serve its customers with market-leading services through one of the largest and most technologically advanced mobile networks in the country. In addition, this transaction frees up capital to deleverage VEON’s balance sheet and invest in critical aspects of the active network and digital opportunities while gaining more financial flexibility. “
CEO of Service-Télécom Nicolas berdin noted: “The agreement with VEON is a key achievement for Service-Telecom on its way to becoming a leading telecommunications infrastructure operator in Russia. With PJSC VimpelCom as a partner, we plan to generate long-term sustainable growth in Russia while building the infrastructure backbone of the digital economy and helping to improve mobile broadband connectivity for consumers. “
This press release contains “forward-looking statements” as defined in Section 27A of the US Securities Act of 1933, as amended, and Section 21E of the US Securities Exchange Act of 1934, as amended. Forward-looking statements are not historical facts and include statements relating, among other things, to expectations regarding the potential benefits of the transaction described above. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with precision and some of which may not even be anticipated by VEON. The forward-looking statements contained in this press release speak only as of the date of this press release. VEON does not undertake to update publicly, except as required by US federal securities laws, any forward-looking statements to reflect events or circumstances after these dates or to reflect the occurrence of unforeseen events. In addition, elements of this press release contain or may contain “inside information” as defined in the Market Abuse Regulation (EU) No 596/2014.
VEON is a global connectivity and internet service provider listed on NASDAQ and Euronext Amsterdam.
For more information visit: www.veon.com.
The “Service-Telecom” group of companies is an independent operator of wireless telecommunications infrastructure. Service-Telecom is present in the major regions of Russia. The leader of independent infrastructure providers in terms of portfolio growth and operational efficiency. For more information visit: www.service-telecom.net
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SOURCE VEON SA