MegaFon Sets IPO Price Range at $20-25

MOSCOW, November 15 (RIA Novosti) – MegaFon, one of Russia’s top three mobile operators, has set the price range for its Initial Public Offering (IPO) at $20-25 per share, the company said on Thursday.

The price range values the company at between $11 billion and $14 billion, and indicates it should raise at least $1.6 billion in a share offering of about 15 percent of its stock. Pricing is expected to be announced and trading expected to commence on November 28.

“We are happy to have reached this stage of the process and expect to receive proceeds of 9-11 billion Swedish krona [$1.32-1.62 billion] following a successful completion of the IPO”, Lars Nyberg, President and CEO of the Finnish and Swedish telecoms giant TeliaSonera, a key MegaFon shareholder, said.

MegaFon announced in October it would offer investors ordinary shares and Global Depositary Receipts held by TeliaSonera and a MegaFon subsidiary, MegaFon Investments, both in Moscow and London.

“Depending on the results of the IPO, TeliaSonera may reduce its current 35.6 percent ownership and still keep a long term strategic ownership of at least 25 percent plus one share in MegaFon after the IPO,” TeliaSonera said.

MegaFon will use the IPO proceeds to repay current liabilities and spend funds on general corporate needs, including further development and network expansion, it says.

Morgan Stanley and Sberbank CIB (formerly Troika Dialog brokerage) have been appointed as the IPO global coordinators while Citi, Credit Suisse and VTB Capital will act as joint bookrunners.

MegaFon CEO Ivan Tavrin said the current market environment was the most appropriate time for the IPO, which will represent a new stage in the firm’s development.


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