Page 148 - RusRPTMar21

Once the transaction is complete, the JV will hold a 94.01% stake in Elektrozavod, whose assets include transformer equipment production facilities in Moscow and Ufa, maintenance divisions, research and design institutes, an engineering centre and 19 ha of land near the Elektrozavodskaya metro station in Moscow.
The JV acquired a 64.37% stake in Elektrozavod and 100% in Elektrokombinat from private investors for R24.7bn in December 2020. Sistema and SberInvest provided the JV with a respective R11.0bn and R3.5bn in equity financing, while SberInvest also provided the JV with R10.2bn of additional debt financing. The parties have also concluded an agreement granting Sistema the right to acquire, and SberInvest the right to sell, its stake in the equity capital of the JV to Sistema.
Analysts consider the deal to be in line with Sistema's strategy to diversify its asset portfolio. Overall, they believe that Ozon - one of the main recipients of Sistema's investments in recent years - is well-funded, and we expect to see more M&A activity from Sistema in the coming years.
9.2.8 Telecoms corporate news
VEON held a 4Q20/FY20 conference call on February 18. Below are our key takeaways. The Russian competitive environment remains rational. VEON confirmed that it does not want to be aggressive on pricing and would rather pursue a more-for-more strategy.
Too early to talk about NPS performance in Russia. The company is currently improving its quality and reducing its churn rate (down 2ppts YoY). The improvement in NPS is a more delayed response, and VEON believes it could be ready to give a more precise NPS assessment in the middle of 2021.
Optimism on the quality of execution in the Russian unit. VEON’s Russian unit saw significant changes in its management team in 2020. Out of the 15 people reporting directly to Russian unit CEO Alexander Torbakhov, who joined the company in April 2020, 12 have joined the company since his arrival.
Current level of capex to continue for at least two years. VEON currently has a 38% penetration of its overall subscriber base in LTE and aims to increase this to 70-75%. Around half of the company’s capex will go to Russia, although the company highlighted that LTE penetration in the Russian market is already around 50%.
148 RUSSIA Country Report March 2021 www.intellinews.com