Russia’s largest mobile operator MTS expects to borrow about US$500m by the end of the year to fuel expansion, according to CFO Alexey Kornya.
In an interview with Bloomberg, Kornya said the company, controlled by billionaire Vladimir Evtushenkov, may…
Russia’s largest mobile operator MTS expects to borrow about US$500m by the end of the year to fuel expansion, according to CFO Alexey Kornya.
In an interview with Bloomberg, Kornya said the company, controlled by billionaire Vladimir Evtushenkov, may take on new debt as early as this quarter. MTS can still access foreign credit markets and borrow in roubles or dollars, he said, as it is not directly impacted by restrictions on Russia linked to the conflict in Ukraine.
Kornya named Ukraine, where MTS’ local unit was the highest bidder in the recent 3G auction, agreeing to pay a total UAH2.72bn (US$83.71m), as an interesting market, saying the company sees longer-term potential there.
There is no final estimate as yet on how much the rollout of the high-speed 3G mobile network, expected to take up to three years, will cost, he noted.
While the market remains challenging, the worst seems to be over, Kornya was cited as saying, adding that, going forward, a lot will depend on oil prices.
The CFO still considers Russia to be an attractive market, saying a lack of understanding among investors has led it to be undervalued.
Kornya said the company, which reported net debt of Rbs185.5bn (US$3.44bn) at the end of 2014, is happy with its level of indebtedness. MTS inked a major loan agreement with Sberbank in the first quarter of 2014, opening a Rbs50bn credit facility and extending an existing Rbs20bn agreement.
As usual, MTS intends to spend at least three-quarters of its free cash flow, which stood at Rbs57bn (US$1.06bn) at the end of last year, on dividends, Kornya said.
MTS reported consolidated group revenues of Rbs410.8bn (US$7.62bn) for 2014, up 3.1% year-on-year. Of this, Russia contributed Rbs374.9bn (US$7bn). The company said it expects group revenues to rise by 2% in 2015. Its forecast for group CAPEX spending for the year is Rbs85bn (US$1.58bn).
