IFC approves $218 mln loan to support merger of Ukrainian operators Datagroup-Volia and Lifecell
MOSCOW. Aug 9 (Interfax) - The World Bank Group's International Finance Corporation on August 8 approved a credit facility of up to $218 million to support NJJ, an investment holding company owned by French billionaire Xavier Niel, and U.S. investment fund 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.
"The deal will enable capital expenditures related to the renewal and modernization of mobile and fixed networks, increasing network stability, service quality, coverage and energy efficiency," Ukrainian media reported, citing information on the IFC website.
Earlier, on July 17, the European Bank for Reconstruction and Development approved a loan of $217.5 million within the framework of this general project.
The recipient is the newly incorporated NewCo which will be indirectly owned by NJJ (85%), Horizon Capital (10%), and Mikhail Shelemba, currently CEO and minority-shareholder in Datagroup-Volia (5%).
It is expected that following the merger, the group will become one of the largest fixed-line and mobile operators in Ukraine, providing mobile communications to about 10 million subscribers and fixed broadband communications to about 4 million homes. Its infrastructure will include base stations, towers and backbone networks. The new company will have about 5,000 employees. In addition, the group will manage retail stores, office space, data centers and outsourced call centers in Ukraine.
The allocation of funds by IFC and EBRD is supported by blended financing under the ERA Ukraine-France program and the European Commission investment program.
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.