Russian mobile operator MTS’s board has approved the acquisition of Sistema Telecom, a non-operating unit of MTS’ parent company Sistema, for Rbs11.59bn (US$379m).
MTS will also assume Sistema Telecom’s debt totalling Rbs1.8bn (US$58.93m), which include…
Russian mobile operator MTS’s board has approved the acquisition of Sistema Telecom, a non-operating unit of MTS’ parent company Sistema, for Rbs11.59bn (US$379m).
MTS will also assume Sistema Telecom’s debt totalling Rbs1.8bn (US$58.93m), which include the settlement of Rbs1.35bn (US$44.04m) debt between MTS subsidiaries and Sistema Telecom.
Sistema Telecom’s main assets consist of a 45% stake in TS-Retail, the outlet network in which MTS already holds 55%, Rbs2bn (US$65.5m) worth of promissory notes previously issued by MTS and propriety rights over trademarks, including the egg-shaped logo for MTS, Comstar-UTS and MGTS.
ING Bank conducted the valuation of Sistema Telecom on behalf of the Special Committee of Independent Directors to the Board. It provided fairness opinion to the Special Committee based on the results of the valuation. Ernst & Young provided due diligence services to MTS, while Latham & Watkins was legal adviser to the Special Committee.
The transaction is expected to complete by the year’s end after receiving approval from Sistema’s Extraordinary General Shareholder Meeting.
