In line with an agreement signed in late 2012, Russian operator MegaFon has completed a transaction that now gives it a 50% stake in retailer Euroset.
In 2012, Lefbord Investments, jointly owned by MegaFon and Garsdale Services Investment, acquired a…
In line with an agreement signed in late 2012, Russian operator MegaFon has completed a transaction that now gives it a 50% stake in retailer Euroset.
In 2012, Lefbord Investments, jointly owned by MegaFon and Garsdale Services Investment, acquired a 50% stake in the handset retailer, valued at US$2.3bn including net debt at the time.
This deal included an agreement that MegaFon would subsequently acquire Garsdale’s half of Lefbord. This part of the arrangement between the companies has now been implemented.
The telco paid US$657.3m for the Lefbord stake, comprised of Garsdale’s original investment in Lefbord in the amount of US$535m, a further US$50m representing Garsdale’s share of earn out related payments made by Lefbord to Euroset, and accumulated interest.
The payment was made in MegaFon shares.
According to MegaFon CEO Ivan Tavrin, the telco decided to pay with treasury shares instead of cash “to retain adequate liquidity position in volatile credit market environment”.
He noted the decision to exercise the option at this point was made in order to “eliminate a sizeable foreign currency liability from the company’s balance sheet and reduce the average cost of our debt.”
