EBRD approves $217.5 mln loan to support merger of Ukrainian operators Datagroup-Volia and Lifecell
MOSCOW. July 22 (Interfax) - The European Bank for Reconstruction and Development has approved financing to support NJJ Holding and Horizon Capital with their plans to create a leading fixed-mobile operator in Ukraine by merging Lifecell Group, a mobile telecom operator, and Datagroup-Volia, a fixed-line operator and existing client of the Bank.
The EBRD will provide a loan of $217.5 million, or half the project's cost, Ukrainian media reported, quoting an EBRD statement.
"The financing will enable capital expenditures related to upgrading and modernizing the mobile and fixed networks of the two entities, increasing network resilience, service quality, coverage, and energy efficiency," the EBRD said.
The newly incorporated NewCo which will be indirectly owned by NJJ, an investment holding company operating mainly in the telecommunications sector and owned by French billionaire Xavier Niel (85%), Horizon Capital, a private equity fund focused on investments in Emerging Europe (10%), and Mikhail Shelemba, currently CEO and minority-shareholder in Datagroup-Volia (5%).
EBRD's participation is also driven by the need "to close a funding gap" given limited commercial financing availability in Ukraine.
It was reported earlier that the EBRD and the World Bank Group's International Finance Corporation planned to provide $435 million finance to the merged Datagroup-Volia-Lifecell.
Turkcell signed an agreement on December 29, 2023 to transfer 100% of shares, as well as all rights and debts of Lifecell LLC, Ukraine's third largest mobile provider, as well as contact center outsourcing company Global Bilgi LLC and tower leasing company Ukrtower LLC to NJJ Capital. The deal will be worth about $525 million, Turkcell said. The company plans to close it by the end of 2024.
NJJ obtained regulatory approval in the spring to acquire Datagroup-Volia, which is 96.13%-owned by the Horizon Capital investment fund and 3.87% by Shelemba.