Russia’s Rostelecom and Tele2 Russia have signed a ‘framework agreement’ to combine their mobile assets under new joint venture, T2 Rus Holdings.
The agreement sets out the terms and conditions under which Rostelecom will contribute its mobile…
Russia’s Rostelecom and Tele2 Russia have signed a ‘framework agreement’ to combine their mobile assets under new joint venture, T2 Rus Holdings.
The agreement sets out the terms and conditions under which Rostelecom will contribute its mobile assets and subsidiaries to the share capital of the JV, the state-controlled telco announced.
It also outlines the operational interaction between the two companies – Russia’s fourth and fifth largest mobile operators – in the period before the deal closes, enabling them to launch commercial integration beforehand.
Rostelecom’s board of directors approved the plan to participate in the JV last December. The move will see the Moscow-based telco transfer assets with an enterprise value of about US$3.5bn.
The agreement provides that the deal will be completed in two stages: the first is expected to close in spring 2014 and the second within the year.
Tele2 Russia will have a 74% economic share and 55% voting share of the JV during the first phase, with Rostelecom holding the remaining stake. Rostelecom will be able to increase its economic interest to 45% upon completion of the second phase.
The first stage will see Rostelecom transfer the shares of its mobile subsidiaries to the JV, along with its integrated mobile assets in ‘start-up regions’ including Moscow and St Petersburg. The telcos will also enter into MVNO, licensing and other agreements for the transitional period. In line with these agreements, Rostelecom will provide services for the JV for a specified period after the first stage has been completed. The companies will also sign a participation agreement defining issues such as the JV’s corporate governance.
During the second stage, Rostelecom will transfer 100% of RT-Mobile shares, which will include its integrated mobile assets, to the JV.
Rostelecom president Sergei Kalugin described the deal as a “key milestone in the implementation of [the company’s] mobile strategy”.
“The company’s mobile assets complement Tele2 Russia’s both in terms of geographical reach and in terms of combining Tele2 Russia’s successful operating model with Rostelecom’s extensive portfolio of frequency spectrums.”
VTB to keep Tele2 Russia stake for at least three years
While signing the framework agreement, VTB first deputy president Yuri Soloviev said the bank intends to keep its investment in Tele2 Russia for at least three years, describing it as a “strategic project” for itself and fellow shareholders, Reuters reported.
Russia’s VTB banking group owns 50% of Tele2 Russia, while a Bank Rossiya-led investor group holds the remainder.
Announcing the signing of the agreement in their own statement today, the banks said T2 RTK Holding will operate under the Tele2 brand name.
The banks noted that the agreement opens up new opportunities for Tele2 Russia, giving it access to 2G, 3G and 4G licences that will enable it to expand mobile coverage across all 83 Russian regions and provide a wide range of services.
Soloviev said the Tele2 management team will continue to develop the new company.
“The creation of a new national operator will play a vital role in the development of Russia’s telecoms market, offering users additional choice and providing access to high-quality and affordable mobile and internet connections.”
