Veon had previously agreed to sell its mobile network towers in Russia to Service-Telecom on September 6 2021 and regulatory approvals have now been obtained by the parties to complete the transaction.
The transaction involves the sale of National Tower Company (NTC) a subsidiary of Veon which operates a portfolio of around 15,400 mobile network towers in Russia.
The price of the transaction is around RUB70.65 billion ($957 million) and corresponds to an EBITDA multiple of 11.7x based on the projected EBITDA of National Tower Company post-completion.
Kaan Terzioglu, VEON's CEO, said: "I am encouraged by the successful conclusion of this transaction and look forward to building our partnership with Service-Telecom.
“This transaction unlocks the value of our infrastructure assets in Russia and allows the release of capital to further optimise VEON's balance sheet while at the same time achieving more financial flexibility for the group".
The proceeds from the transaction will be used to reduce external debt of the Group.
The conclusion of the deal paves the way for a long-term partnership between PJSC VimpelCom and Service-Telecom.
Service-Telecom CEO Nikolay Berdin added: "Following a highly competitive tender process, we completed this historical, first-ever, tower transaction in the Russian market.
“This highlighted the financial capabilities of the group and demonstrated the expertise of the Service-Telecom team both in its ability to manage the tower business and M&A.
“By entering this transaction with VimpelCom, we'll continue to successfully run the business to develop a national mobile network infrastructure that matches the country's ambitions."
