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leader," CEO of Vimpelcom Jean-Yves Charlier is quoted as saying. Under the VEON umbrella such services as a new Internet platform, free messaging services, and new services from music to banking functions are planned for launch. The company is also announcing partnerships with STUDIO+, Deezer and MasterCard, integrating the services into the future platform. At the same time, major shareholder of Vimpelcom Alfa Group (47.9% stake held through London-based LetterOne or L1) has stepped up its high-tech investment, with an unspecified amount invested in Finnish provider of cloud solutions for telecom companies Qvantel, the company said in November 2016. Notably, products developed by Qvantel will be used by Vimpelcom. In June 2016, Vimpelcom and Ericsson closed a $1bn equipment supplies deal, while Ericsson already integrated Qvantel solutions into some of its systems for telecom operators. Possibly as part of the current restructuring, in January Vimpelcom offered Norway's Telenor a controlling interest in GTH in exchange for 12% of its own shares, Vedomosti daily reported on January 18. GTH controls Vimpelcom's assets in Algeria, Pakistan and Bangladesh. After selling a 9% stake at the end of last year, Telenor currently owns 24% of Vimpelcom. Another 14% is used as collateral for Telenor's convertible notes. The Norwegian operator eventually intends to fully divest its equity stake in Vimpelcom. "An asset swap would be beneficial to both parties," Gazprombank said in a research note on January 18. "GTH contributes 10% of Vimpelcom's turnover and 10-12% of the company's total value."
MTS continues its buyback. MTS has announced the next part of its buyback, by means of a tender offer within a price range of RUB253 (a 4% discount to late January’s closing price) and RUB283 (7% premium). As previously, the pro rata number of shares will be sold by AFK Sistema (MTS's key shareholder). In total the company may spend around RUB9.3bn on this stage of the programme. In 2016 MTS announced a share buyback programme, planning to allocate RUB30bn over three years. The first stage, which commenced on 31 October 2016, returned RUB700mn out of a planned RUB9.9bn.
Russian phosphate fertiliser major PhosAgro held an SPO on February 13, increasing its free float from 20.6% to 25.1%, tapping the equity market for the first time since spring 2013. Shares of Phosagro, which emerged as a blue chip among Russian fertiliser companies in 2016, are at record high values. However, following the SPO announcement the shares declined by 2.4% to RUB2.766 per share on the day. Phosagro posed a positive free cash flow in the third quarter of RUB8.7bn. The company limited capex to RUB30bn in January-September against a guidance of RUB43bn for 2016 overall, thereby decreasing the net debt by 2% to RUB95bn, with net leverage flat at 1.2x and short-term debt covered by on-balance cash by 1.4x.
Russian oligarch Oleg Deripaska has hired US banks Citi and JP Morgan together with Russian investment banks Sberbank CIB and VTB Capital to prepare his energy holding EN+ for an IPO this year, two financial market sources told Reuters on February 9. En+, which operates in the energy and minerals sector, owns 48% of Hong Kong-listed Russian aluminium producer Rusal and the Evrosibenergo energy holding. The group listed on Asian exchanges several years ago. Its last offering for just under 11% it shares raised $2.24bn on the Paris and Hong Kong exchanges. Reuters’ sources said that the list of the banks that arrange the deal was not final, without providing details. Russian equity markets are open for business again after gaining over 50% in 2016 and are expected to return at least 15% this year. Sentiment got a further boost following the IPO of Russia’s Detsky Mir toy store on February 8,
83 RUSSIA Country Report February 2017 www.intellinews.com