Page 85 - RusRPTDec19

in Tele2, while paying for the remaining 45% with cash. As part of the private offering, Rostelecom will issue 708mn common shares - worth about R66bn at the approved price of R93.21 per share - to VTB. The proceeds should be used to finance the purchase of the 45% stake in Tele2, which was reportedly valued at R108bn. This means that Rostelecom might have to make an additional cash contribution of R42bn, which could increase its post-IFRS 16 net debt/EBITDA from the current 2.1 to 3.5 (both of these figures exclude the Tele2 consolidation). The approved price for Rostelecom's common shares puts the value of Tele2's total equity at RUB240bn and its EV at R379bn assuming the reported net debt/EBITDA of 1.9. That would imply a 2019E EV/EBITDA for Tele2 of 5.7, versus 3.5 for Rostelecom and 4.2 for MTS. We think that the reported net debt/EBITDA figure for Tele2 might be excluding capitalized leases, which could bring the leverage ratio to 2.3 and EV/EBITDA to 6.2.
Pawnshop chain MosGorLombard is considering holding an IPO on the Moscow Exchange ​in the first quarter of 2021, RBC business portal reported on November 14, making the first of its kind public offering in Russia. Reportedly, MosGorLombard plans to raise RUB4bn over three years, out of which RU2.5bn would be contributed to the capital. In the offering 20% of the capital would be made public, while 5% is planned to be placed on a closed subscription. Another RUB1.5bn will be raised through bond issues. The funds raised in equity and debt would be used to expand through acquisitions in Moscow and the Moscow region. By 2023 MosGorLombard plans to acquire over 200 pawnshops to become the largest chain in Moscow. MosGorLombard was founded in 1924 and was owned by the city of Moscow until 2014. It was then bought by the Bank of Moscow, later taken over by VTB Bank. In 2018 MosGorLombard was acquired by the KVP Group pawnshop chain for RUB160mn-240mn. In June MosGorLombard was valued at RUB1.4bn.
Russian metals major ​Norilsk Nickel​ will postpone the IPO of its copper mine Bystrinskiy to 3Q20​, Reuters said on November 20 citing the co-owner of the company Vladimir Potanin of Interros. As reported by ​bne IntelliNews,​ NorNickel together with other Russian metals majors has recently ​increased its investment programme​, possibly at the expense of dividends, although management told ​bne IntelliNews t​ hat the current dividend policy will remain in place until 2023 due to an agreement with minority shareholders. At the same time the company is expected to get a boost from ​nickel ore exports ban in Indonesia​, as well as ​growing demand for palladium group metals​ (PGM) that is expected to drive up prices. However, the IPO of Bystrinskiy was previously seen as ​immaterial by the analysts​. BCS Global Markets estimated Bystrinskiy's value at $1.5bn-1.6bn using a target Price/Earnings ratio of 8x at 50,000 tonnes.
Telenor is reportedly selling its remaining stake in ​Veon​. Bloomberg reports. The agency’s sources also claim that Telenor is aiming to sell its 156.7mn ADRs (9% share capital vs 35% currently in free float) at $2.32-2.35 (4-5% discount to yesterday's price). No other details were disclosed.
8.4 ​International ratings
Russia - Rating agency
as of September 1, 2019
last change
85​ RUSSIA Country Report​ December 2019 ​ ​www.intellinews.com