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.