VimpelCom is reportedly looking at an IPO as one of a number of ways to monetise its tower assets in Russia and other ex-Soviet republics, and now has three banks examining its options.
VimpelCom (NASDAQ:VIP) is reportedly looking at an IPO as one of a number of options to monetise its tower assets in Russia and other ex-Soviet republics.
The CEO of VimpelCom’s Russian subsidiary has previously said the operator was looking at tower sales “very seriously” and the company mandated the Moscow branch of BofA Merrill Lynch to advise in the summer.
VimpelCom has now hired UBS and boutique TAP Advisors to work on the process as well, Bloomberg reported citing people familiar with the matter.
The talks are focused on VimpelCom’s 50,000 towers across Russia, Ukraine, Kazakhstan, Armenia, Kyrgyzstan, Uzbekistan, Tajikistan and Georgia, which could be worth upwards of US$5bn, according to the people in the Bloomberg report.
In addition to an IPO or straight sale, VimpelCom could create a holding company with an industrial or financial partner, the report said.
Responding to a request for comment on the report, VimpelCom said: “We continue to monitor trends in the global telecoms market and are looking at effective business models for tower infrastructure which help reduce costs and construction time, aid geographical expansion and increase quality for consumers at an attractive price.”
Of VimpelCom’s subsidiaries, its Russian business generates the most revenue, but like other operators in the country it is facing significant headwinds. Russia’s economy is faltering due to falling oil prices and international sanctions at a time when operators are upgrading their networks, which industry observers have suggested could finally be the catalyst for tower sales in the country. In early August, VimpelCom’s new CEO Jean-Yves Charlier said that under its globalised, asset-light strategy, Vimpelcom would “dispose of tower portfolios, just as we have done in Italy” and “selectively enter into network sharing agreements,” particularly in larger markets.
Potential buyers for sites in Russia include Russian Towers, the country’s only significant independent towerco, and the Russian Direct Investment Fund (RDIF), a US$10bn fund aimed at domestic equity investments.
Earlier this month, one VimpelCom investor decided it had had enough of the company. Telenor has put its 33% stake in the Amsterdam-based group up for sale, saying that its “challenging” investment in VimpelCom has contributed less and less value to the Norwegian incumbent’s business.
