The CEO of Megafon has said the Russian operator is planning to put its 14,000 towers into a new subsidiary to monetise the assets.
The CEO of Megafon (MCX:MFON) has said the Russian operator is planning to put its towers into a new subsidiary to monetise the assets.
Speaking on a conference call as Megafon announced its Q3 results, Igor Tavrin (pictured) said a sale was not imminent as it would take months to separate its 14,000 sites into a new unit.
The disclosure follows rival VimpelCom Russia mandating BofA Merrill Lynch, and reportedly UBS and TAP Advisors, to examine an IPO and other options for its tower assets in Russia and other ex-Soviet republics.
VimpelCom’s 50,000 towers across eight countries reportedly could be valued at US$5bn. Tavrin did not put a valuation on Megafon’s towers.
Megafon did not comment on whether it had hired an adviser for its process.
A competitive four-player market coupled with an expansive geography and a tough macroeconomic environment means Russia is primed for tower disposals. Operators in the country have been reticent to separate their infrastructure in the past, believing there is strategic importance in wholly owning their networks.
The economic downturn, following both the western sanctions in response to the war in Ukraine and the devaluation of the rouble, which has come during an investment cycle, has led to operators reassessing their traditional views.