Russian mobile operator MegaFon today announced plans to proceed with an IPO on the London Stock Exchange (LSE) before the end of the year.
The IPO is expected to include an offering of ordinary shares inside Russia and an offering of ordinary shares…
Russian mobile operator MegaFon today announced plans to proceed with an IPO on the London Stock Exchange (LSE) before the end of the year.
The IPO is expected to include an offering of ordinary shares inside Russia and an offering of ordinary shares and global depository receipts to institutional investors outside Russia, the company stated.
Offered shares will include a portion of those currently held by Sonera Holdings, a unit of MegaFon’s Swedish shareholder TeliaSonera, and MegaFon subsidiary MegaFon Investments (Cyprus) Limited (MICL).
While MegaFon has approval from the Russian regulator to list up to 123.38 million shares (19.9% of the total) abroad, the operator did not specify today the size of the stake it plans to float. Russian newspaper Kommersant reported the company now intends to list just 15%.
Similarly, while the IPO, which is subject to relevant registrations and regulatory approvals, had been expected to raise about US$4bn, analysts are now touting a figure of US$2bn to US$3bn, depending upon the size of the stake offered.
Investor Alisher Usmanov is MegaFon’s controlling shareholder via AF Telecom with a 50% stake plus one share. TeliaSonera owns 35.6% and MICL owns 14.4%.
Announcing its major ownership changes in April, which saw Usmanov secure his majority stake, MegaFon said TeliaSonera would contribute up to 10.6% of the shares to be floated, while MegaFon would contribute up to 9.4%.
Today, MegaFon said the aim of the offering and listing is “to enhance the company’s capital markets profile and access, providing strategic flexibility to support its long-term growth and development”.
The company plans to use the net proceeds of the MICL offering to repay debt and for general corporate purposes, including the development of its network.
Morgan Stanley and Sberbank CIB are acting as global coordinators and joint bookrunners for the IPO. Citi, Credit Suisse and VTB Capital are also joint bookrunners.
MegaFon is Russia’s second largest mobile operator with about 62 million subscribers (equal to a market share of about 27%). MTS is the largest operator with a 30.6% market share and VimpelCom is the third largest with a 24.5% share.
MegaFon claims to have been the nation’s largest operator in the mobile data sector since 2008. The company was the first of the so-called ‘big three’ Russian operators to offer LTE/4G high-speed mobile broadband data services to customers and expects to be able to offer such services in more than 40 cities, including Moscow and St Petersburg, by the end of the year.
MegaFon reported consolidated total revenue of Rbs244.6bn (US$7.86bn) and OIBDA of Rbs100.8bn (US$3.24bn) for 2011.
