VEON announced agreement to sell its mobile network towers in Russia to Service-Telecom for $970 million.
Service-Telecom is a partner to VimpelCom, which operates in Russia under the Beeline brand, and already provides the company with passive infrastructure across various regions in Russia.
The sale reflects VEON’s strategy on focusing on active portfolio management and deriving value of its infrastructure portfolio. VEON has over 50,000 towers across nine dynamic markets.
The transaction involves the sale of 100 percent of National Tower Company (NTC), a subsidiary of VEON, which operates a portfolio of approximately 15,400 mobile network towers in Russia. All of the active mobile network infrastructure currently operated by VimpelCom and the majority of the rooftop towers will remain with the company.
VimpelCom and Service-Telecom have also entered into a long-term master agreement regarding the provision of tower infrastructure services for an initial period of 8 years, and multiple extensions of 8 years at the discretion of VimpelCom. Both parties will additionally enter into a new build-to-suit program comprising of up to 5,000 sites by 2029.
The purchase price for the transaction of $970 million corresponds to an EV/EBITDA multiple of 11.7x 2021 based on projected EBITDA of NTC post-completion.
The transaction is subject to customary regulatory approvals and closing is expected to take place in the fourth quarter of 2021.