MegaFon considering buying ER-Telecom - paper
MOSCOW. Aug 1 (Interfax) - MegaFon , one of Russia's top three mobile service providers, is in talks with the owners of ER-Telecom Holding to buy the broadband provider, business daily Vedomosti reported on Monday, citing sources close to the management of the companies.
The discussion of a possible deal is in the initial stages, the paper reported a source close to ER-Telecom's co-owners as saying. The company is looking for sources of financing, including because many deals in Russia's regions did not live up to expectations, another source said.
"MegaFon carefully studies all proposals that it receives concerning M&A deals. Before making a decision on a purchase, we conduct a detailed analysis of the subject of the deal and if the asset is of interest to MegaFon, an affirmative decision is made," company spokesperson Yulia Dorokhina said without commenting on the report about the possible purchase of ER-Telecom.
ER-Telecom is not holding talks on the sale of the company, ER-Telecom spokesperson Nino Donadze told Interfax. "With MegaFon we have established long-term partnerships. So, this year we launched a joint convergent product, which brings together services of both operators, in several Russian cities we are planning to develop it further," she said.
ER-Telecom had a 9% share of the Russian broadband market at the end of June, with a subscriber base of 2.84 million households, according to TMT Consulting. The company had 2.73 million pay TV subscribers, or 6.8% of the market, Telecom Daily estimated.
ER-Telecom's closed 2015 with revenue of 22.2 billion rubles, almost unchanged from 22.1 billion rubles in 2014. The company's EBITDA fell 15.7% to 7.5 billion rubles. The company reported that its net debt was 14.4 billion rubles, and the net debt/EBITDA ratio was 1.9. ER-Telecom invested 4.1 billion rubles in 2015, 20.6% more than in 2014.