Veon has closed the sale of its Russian mobile towers to local firm Service-Telecom, a partner of VimpelCom’s Beeline, for RUB70.65 billion (US$957 million).
CommsUpdate reports that the deal was first announced on 6th September 2021, and has now received all the regulatory approvals required for Veon to transfer 100% of its National Tower Company (NTC) subsidiary to Service Telecom. The unit operates around 15,400 towers across Russia.
VEON CEO Kaan Terzioglu said: “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.”
Upon closing the deal, Veon received an upfront payment of RUB64.4 billion with the balance to be paid over the next three years. The Amsterdam-headquartered group has said that it plans to use the proceeds for “critical aspects” of network and digital services, as well as paying down its debt which stood at US$8.2 billion at the end of Q3.
Service-Telecom has entered a “long-term master agreement” with Beeline that will see the towerco provide infrastructure services to the operator for an initial eight-year period, with Beeline able to extend the agreement in eight-year increments as it wishes. The companies are also forming a “build-to-suit” initiative that will see 5000 new sites constructed by 2029.
Nikolay Berdin, CEO of Service-Telecom, said: “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.”