The transaction on the sale by MTS (Russia) to the Azerbaijani telecommunications company Bakcell of Vodafone Ukraine, the second largest mobile operator in the country, can be considered profitable, since MTS during 2010-2019 received $2.087 billion from this company, which is 5.5 times more than it invested.
This opinion was expressed by the head of the analytical department of Concorde Capital investment company, Oleksandr Paraschiy.
“MTS is one of the most successful investors in Ukraine. During 2003-2004 MTS bought a 100% stake in UMC (MTS-Ukraine, Vodafone Ukraine) for $378 million in cash. MTS has just sold the company for $734 million in cash (94% more than it bought it 15 years ago). During 2010-2017 the Ukrainian subsidiary of MTS paid (it is clear to whom) dividends totaling $1.353 billion (according to my estimates). So, we have: $378 million was invested in the company, $2.087 billion was received from the company during 2010-2019, or 5.5 times more than invested,” he wrote on his Facebook page.
According to Paraschiy, the average annual profit of MTS from investments in Ukraine during 2004-2019 amounted to 20%.
“The cost of the Ukrainian division of MTS under the agreement with Bakcell amounted to $848 million (according to MTS), which is 38% less than the conditional value of the Ukrainian division in the structure of MTS, ceteris paribus. The market will show whether it is a good deal for MTS or not. So far, the market is “inclined to believe” that the deal is good: MTS shares have risen slightly in price today. Perhaps one of the reasons for the growth is MTS’ promise to pay dividends to the shareholders from part of the money received from Bakcell,” he said.
Vagif Aliyev, the founder of PrJSC Mandarin Plaza, the investor and developer of Kyiv-based Lavina shopping center, on November 20 launched the first stage of the Blokbuster Mall shopping and entertainment center in Bandery Avenue in Kyiv, investing $400 million in construction. According to an Interfax-Ukraine correspondent, only a Silpo supermarket has started working in the facility. The rest of the stores will be launched on a fan-based basis as they are ready, the founder of Nai Ukraine, the project broker, Vitaliy Boiko, said.
According to him, the cost of investments in the construction of the Blokbuster Mall shopping center was $400 million. The total area of the first stage is 200,000 square meters, the leased area is 110,000 square meters. After the launch of the second phase, which is at an early stage of construction, the total area will be 300,000 square meters, the rental area some 200,000 square meters. The facility is located on a plot of 30 hectares.
“Vagif Aliyev’s pipeline now contains projects for EUR2.9 billion (12 projects of shopping and entertainment centers). This is the second largest indicator in the world in terms of development of retail real estate. Westfield is the first developer in the world with EUR8 billion, and the third one is one of the largest European investors with EUR2.5 billion. The uniqueness is also that all Mandarin Plaza projects are located in one city – Kyiv,” Boiko said at a briefing.
The acquisition of Guardian insurance company (Kyiv) by new shareholder, who is citizen of Lithuania, Arunas Siksta was started on March 12, 2019, the insurer has said in a press release.
According to the report, Siksta is a senior manager with thirty years of experience in banking, insurance and telecommunications. In particular, he collaborated with AB Swedbank, which representative office he headed in Lithuania, as well as with Norway’s largest insurance company, Gjensidige, where he served as deputy board chairman. In addition, for several years he was engaged in the integrated construction of a financial infrastructure for European banks, including the creation of insurance companies from scratch.
According to the press release, the new shareholder was satisfied with the results of the financial and personnel audit of Guardian insurance company.
“My auditors provided enough information that I found to be perfectly satisfactory. According to the results of the financial statements, the company’s performance is at a proper financially stable level, and the staff is highly qualified, which is what the figures say. Based on this, I see no need to reform the company or make any rotations. All management, employees and branches will work in the same mode and composition. Our plans are only to expand and improve the quality of services for our clients,” the company said in the press release, citing Siksta.
The press service also said that during the visit of the new shareholder of Guardian to Ukraine, he met with Head of the National Commission for Financial Service Markets Regulation of Ukraine Ihor Pashko and President of the League of Insurance Organizations of Ukraine Oleksandr Filoniuk. At the meeting, Siksta expressed confidence that the Guardian insurance company would be a worthy example of effective investments in the Ukrainian insurance market, and by providing services at a new level of quality it would increase customer confidence in this sector.
“Today, Lithuanian investments in the Ukrainian market are coming more and more often, but not in such volumes and not in the insurance sector. You are the first and we are very pleased with such serious investors,” Pashko said.
Guardian has been working in the insurance market since 2007.
Mriya agroholding in June 2018 received an offer to acquire the entire business and assets of the company from an international strategic investor who has experience of operations in Ukraine. “The cost of this offer envisages (if the transaction is signed) compensation to holders of bonds issued by Mriya Farming in connection with the restructuring of about 50 to 60 cents per U.S. dollar of face value of new bonds outstanding after the restructuring is completed (expenses related to the transaction deducted),” the press service of the agroholding reported.
The offer involves a number of conditions, including the successful completion of the restructuring of the company and its subsidiaries, as well as obtaining all necessary regulatory approvals. Secured debt is proposed for acceptation by the strategic investor and servicing in accordance with existing or other agreements between the potential buyer and secured creditors.
“The company intends to enter into negotiations with the offeror on the terms of the potential deal to approve the necessary documentation for the binding offer. After the completion of the restructuring any sale of the company is to be agreed with the shareholders of the company in accordance with the terms of the issue of new bonds and shareholders’ agreement of Mriya Farming adopted in line with the terms of the restructuring,” Mriya said.
At the same time, the agricultural holding said that the offer is not a guarantee of the signing of the deal, a condition of which is still reaching an agreement on the final terms of the documents required for the transaction.
Mriya reported that Rothschild is the sole financial advisor, and Hogan Lovells acts as a legal advisor in matters related to the sale. As reported, in May 2017, Mriya and IFC approved the conditions for restructuring of Mriya’s debt. The parties agreed to split the debt into a secured and unsecured part. They also stipulated terms for restructuring the secured part of the debt. Mriya’s unsecured debt to IFC will be restructured on common conditions for all unsecured creditors.
Mriya’s total debt is $1.087 billion, of which $46 million is loans for working capital, $7 million for leasing of agricultural machinery, $130 million is secured loans, and $904 million is unsecured loans.
After the restructuring, the amount of secured loans will be reduced to $62 million, unsecured ones to $213 million. Mriya is a vertically integrated agro-industrial holding founded by Ivan Huta in 1992. Today, its land bank is 165,000 ha in Ternopil, Khmelnytsky, Ivano-Frankivsk, Chernivtsi, Lviv and Rivne regions. The capacity of its grain storage facilities is estimated at 380,000 tonnes.
