RUSSIAN MTS PURCHASES 80% STAKE IN INTERNATIONAL CELL HOLDING LTD – OWNER OF K-TELECOM
ARKA
14 Sept 2007
YEREVAN, September 14. /ARKA/. The biggest operator of mobile
communication in Russia and CIS – Mobile telesystems (MTS) OJSC
reported about purchase of 80% stake in International Cell Holding
Ltd. that is 100% indirect owner of Armenian leading mobile operator
K-Telecom company (VivaCell trademark).
The sides signed an option agreement on purchase/sale of the remaining
20%.
The value of transaction made EUR 310mln, including EUR50mln to
be paid to the seller during 2008-2012 if set target indicators of
revenue and profitability of K-Telecom are achieved.
MTS is also to allocate EUR 140mln credit to K-Telecom to refinance
existing loan facilities and for further investments.
The option agreement on purchase/sale of the remaining 20% comes
into force not earlier than June 2010 and will be effective till
2012. The price for the holding of stock is set based on estimate of
an independent international bank.
This purchase fully complies with MTS’s strategy to capture rapidly
growing markets of CIS, President of MTS Leonid Melamed said.
According to him, Armenia became MTS’s sixth country of operations
in CIS.
"We are pleased to gain entry into this exciting market by partnering
with the market’s leading mobile operator. VivaCell’s high-quality
organization, professional management team and exceptional network
quality coupled with MTS’s experience in the CIS will create synergy
allowing us to fully utilize the market’s potential in the best
interests of our subscribers and shareholders," Melamed said.
"Management has built a solid business in a short period of time, as
well as established foundations for future growth of K-Telecom, and
we are please to enter into this partnership. We would also like to
welcome K-Telecom’s employees in our ranks. Together we will continue
our proud traditions of being one of the top wireless operators in
the world," Melamed added.
In his turn, Chairman of the Board of Directors of K-Telecom Pierre
Fattouche stressed that he remains committed to Armenia’s potential
and to K-Telecom’s development and the consolidation of its leading
position in the market. "Looking ahead, we see great growth prospects,
enhanced through our partnership with a leading wireless operator
such as MTS," Fattouche said.
K-Telecom operates in GSM standard covering the entire territory of
Armenia. The license of the company is valid till 2019. As of July
1 2007 the company’s subscribers numbered 986,000, which, according
to the estimates of MTS, make up 66% of the market.