MegaFon to extend $2.2-bln loan to its subsidiary Megafon Investment
MOSCOW. April 20 (Interfax) - OJSC MegaFon will issue a $2.2-billion loan to its subsidiary Megafon Investment Ltd, the operator said in a press release.
The funds will be provided over three years in several tranches under an interest rate of 7.5% per annum.
MegaFon's shareholders approved the deal at an extraordinary meeting on April 19, and the transaction was finalized at the same time.
MegaFon created its 100% subsidiary Megafon Investment on March 27 of this year. "This is a wholly-owned subsidiary for the possible management of telecommunications assets in the future," Megafon told Interfax. The company declined to provide further comment.
MegaFon said that there are no plans for deals with Megafon Investment participation in the near future.
Meanwhile, information recently emerged that MegaFon might buy out the 25.1% stake of its own shares from Altimo (an Alfa Group structure). A source close to the operator's shareholders said that there are plans to carry out the deal using loan resources.
This week, MegaFon raised a bridge loan of $2 billion from Citibank, BNP Paribas Bank and Barclays Bank. The funds are initially available for six months with a possible extension by another six months and may be disbursed in tranches one-to-three months from the signing of the agreement. Funds are repayable at LIBOR plus.
In order to pay back the bridge loan, MegaFon could use funds raised from a bond placement. The operator currently has three registered ten-year, ruble-denominated issues worth 10 billion rubles each.
Analysts have appraised Altimo's stake in MegaFon at about $5 billion, based on a value for the operator of $20 billion. Megafon, according to the company's financial statement, had 87.4 billion rubles (about $3 billion) in cash and cash equivalents at the end of 2011.
It was reported recently that billionaire Alisher Usmanov, who currently owns 31.1% of MegaFon (8% directly and 23.14% through Telecominvest), is interested in buying Altimo's stake in the company. Altimo and Megafon's third shareholder, Scandinavian telecom company TeliaSonera, confirmed that negotiations were being held to change the Russian operator's shareholder structure. TeliaSonera owns 43.7% of Megafon, including 35.6% directly and 8.15% through Telecominvest.
If Megafon independently acquires Altimo's stake, it will have to either cancel the shares or transfer them to the balance sheet of one of its subsidiaries. In either case, Usmanov will receive control over MegaFon's management.
TeliaSonera AB would not be averse to increasing its stake to controlling or higher. Its CEO, Lars Nyberg, has said that while it is vital to have some local partners in foreign operations, TeliaSonera's stake in foreign operations, which also include Turkey's Turkcell, should preferably be between 75% and 90%.
TeliaSonera already tried to strengthen its position at MegaFon in 2009 by forming an alliance with Altimo, which planned to combine its stakes in MegaFon and Turkcell in a joint venture; however, a Russian court stopped the deal, as it would have given TeliaSonera virtual control of the joint venture and, consequently, of MegaFon, and Russian law bans foreign state-owned companies such as TeliaSonera from controlling strategic companies such as Megafon. TeliaSonera is a foreign state-owned company controlled by the governments of Sweden and Finland.