VTB looking to sell Tele2 stake to Rostelecom

VTB looking to sell Tele2 stake to Rostelecom

The CEO of Russian bank VTB has confirmed that it intends to sell its interest in Tele2 Russia to state-run operator Rostelecom.

Andrei Kostin noted that VTB was keen to shift the stake as it no longer wishes to be liable for Tele2’s debt, stating: “VTB will fully withdraw from Tele2.” The bank acquired the Russian arm of Sweden’s Tele2 in 2013 for $2.4 billion, at which time it also assumed the unit’s $1.15 billion in net debt.

Tele2 Russia’s value is estimated at around RUB150 billion ($2.3 billion), with VTB’s holding worth an around RUB41.25 billion. However, the ownership structure has several layers: Tele2 Russia is wholly owned by T2 RTK Holding, of which 45% is owned by Rostelecom and 55% by Tele2 Russia Holding – the latter of which is in turn 50% owned by VTB, with the remaining 50% split 40:10 between Invintel and Rossiya Bank.

Rostelecom boss Mikhail Oseevsky said: “It’s too early to talk about the structure of this transaction, since we have not yet moved on to any formal procedures. We have a basic model that requires final reflection and formalisation.”

However, if the deal goes ahead, it could have major ramifications. ComNews reported that some analysts believe a merger between Rostelecom and Tele2 could overtake MTS, becoming the largest operator in Russia.

VTB will not abandon all involvement with Tele2, however – the bank’s chairman Anatoly Pechatnikov confirmed that the companies were still planning to launch an MVNO together in September.

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