VimpelCom Seen on the Other Side of Equator
Russia’s cellular giant VimpelCom is approaching the markets of Africa. The operator has negotiated the acquisition of MTN, the biggest telecom operator in Africa, reported The Wall Street Journal. According to analysts, MTN, which capitalization is about $40 billion is too expensive for VimpelCom, but it might have attracted Altimo that owns 44 percent in that cellular operator of Russia.
According to WSJ, VimpelCom negotiated the MTN purchase past month, but the parties failed to agree on the whereabouts of united company. VimpelCom declined to comment on the news yesterday and Altimo didn’t comment on it either.
MTN Group is a telecom company that was founded in 1994 and has headquarters in Johannesburg. It operates in 21 states of Africa and Middle East (Iran, Afghanistan, Syria, Yemen). The 2007 revenues reached $9.7 billion, EBITDA was $4.2 billion. It has the subscriber base of 61.4 million and its stocks are quoted on JSE.
The attitude of analysts to potential deal is ambiguous, as the burden would be too heavy for VimpelCom. “For a Russian company, it makes sense, of course, to enter the markets of Africa and Middle East, which the global players haven’t taken yet,” said Andrei Bogdanov, the leading analyst at Troika Dialog. “But for VimpelCom, it is a very costly acquisition; its capitalization is roughly $31.7 billion, while MTN has around $40 billion.” The telecom division of Alfa Group, Altimo, might have been the actual negotiator, the analyst supposed.
If it had been really VimpelCom that negotiated the buyout of controlling interest in MTN Group, the news would be more negative than positive, specified Uralsib analyst Konstantin Belov. “After the acquisition of Golden Telecom, the net debt of VimpelCom grew to roughly $6 billion with the 2007 EBITDA of $3.6 billion. This ratio is normal, but adding $20 billion to the debt will make it abnormal,” the analyst explained.
www.kommersant.com
All the Article in Russian as of May 08, 2008
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