Russia’s VTB banking group has completed the sale of a 50% stake in Tele2 Russia to a group of strategic investors, including Bank Rossiya and entities controlled by Alexey Mordashov.
VTB did not disclose the sale price but said it was in line with…
Russia’s VTB banking group has completed the sale of a 50% stake in Tele2 Russia to a group of strategic investors, including Bank Rossiya and entities controlled by Alexey Mordashov.
VTB did not disclose the sale price but said it was in line with expectations.
The bank, which acquired Tele2 Russia from its Swedish parent for US$3.55bn in March, noted that the terms and conditions of its earlier agreement with Tele2 have been respected. These included a condition entitling Tele2 to half the proceeds if VTB sells Tele2 Russia shares within a year.
VTB, which received advice on the deal from Citigroup and VTB Capital, did not reveal the names of the other buyers in its statement today and a spokesperson declined to comment further. Bank Rossiya is partly owned and chaired by billionaire Yury Kovalchuk, a long-term acquaintance of Russian president Vladimir Putin, while Mordashov is the major shareholder in steelmaking giant Severstal.
Commenting on the deal, which already has regulatory approval, VTB Bank management board chair Yuriy Soloviev said: “I believe the new strategic partnership will strengthen the market position of Tele2 Russia and will allow the company to become one of the leaders in the Russian telecommunications market.”
Meanwhile, Reuters quoted Soloviev as saying the deal has been “profitable” for the bank and that it intends to remain an equal partner in Tele2 Russia. VTB has said previously it intends to take the company public within three years.
There has been considerable speculation that the Tele2 Russia stake sale could mark a step toward an eventual merger with state-controlled Rostelecom’s mobile assets.
Tele2 Russia is the nation’s fourth-largest mobile operator behind MTS, MegaFon and VimpelCom.
