OJSC Megafon (MFON) - Pricing for Initial Public Offering RNS Number : 1778S OJSC Megafon 28 November 2012 NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. MegaFon IPO priced at US$ 20 per share and GDR MOSCOW, Russia (November 28, 2012) -Open Joint Stock Company MegaFon ("MegaFon" or the "Company") today announces the pricing of its ordinary shares ("Shares") and global depositary receipts ("GDRs" and together with the Shares, the "Securities") sold in its initial public offering ("IPO" or "Offering") by Sonera Holding B.V., a subsidiary of TeliaSonera AB ("TeliaSonera"), and MegaFon Investments (Cyprus) Limited ("MICL"), a wholly owned subsidiary of MegaFon(together the "Selling Shareholders"). Highlights · The Offer price is set at US$20 per Share and per GDR, with each GDR representing an interest in one Share. · The total size of the Offering is US$1.7 billion excluding the over-allotment option. · The Offer price implies a market capitalisation of MegaFon of US$11.1 billion at listing. · The Offering consists of 84,526,819 Shares in the form of Shares and GDRs, excluding Shares and GDRs subject to the over-allotment option. · Following completion of the Offering, prior to exercise of the over-allotment option, the free float will account for approximately 15.2% of the Company's share capital (excluding shares owned by MICL post offering), while AF Telecom and TeliaSonera will hold approximately 55.8% and 29.0%, respectively (in each case, excluding shares owned by MICL post offering). · MegaFon expects to use approximately 50% of the net proceeds from the Offering received through its subsidiary MICL to repay or refinance existing debt and the remainder will be used for general corporate purposes including the continuing development and expansion of its network. · The Selling Shareholders will, pro rata to the number of Shares and GDRs being sold by each of them, grant the Joint Bookrunners an Over-Allotment Option to acquire up to an additional 10% of Shares and GDRs allocated in the Offering, at the Offer price · Conditional dealings in the GDRs on the London Stock Exchange and trading in the Shares on the MICEX Stock Exchange commence today, both under the symbol MFON. Admission of the GDRs to the Official List and to unconditional trading through the International Order Book of the London Stock Exchange is expected to take place on 3 December 2012. · Morgan Stanley and Sberbank CIB are Joint Global Co-ordinators and Joint Bookrunners and Citi, Credit Suisse and VTB Capital are Joint Bookrunners. Commenting on today's announcement, Sergey Soldatenkov, Chairman of the Board of Directors of MegaFon, said: "On behalf of the Board I welcome all our new shareholders. We are committed to a strategy of delivering attractive returns to all investors. Through the implementation of this strategy we believe our new shareholders can benefit from further growth in the Russian mobile sector." Ivan Tavrin, CEO of MegaFon, said: "We received high quality institutional demand from all regions in which the Securities were offered. The successful pricing of our IPO today is a clear endorsement of MegaFon's investment case and reflects investor appetite for the Russian mobile data growth story. We look forward to delivering further profitable growth and value creation as we continue to leverage our leadership in mobile data to exploit the significant opportunities we see ahead." Enquiries OJSC MegaFon Peter Lidov Tel: + 7 926 200 6699 email@example.com Elena Alexandrova Tel: + 7 926442 5383 firstname.lastname@example.org Citigate Dewe Rogerson (London) Tel: +44(0)20 7638 9571 David Westover Andrew Hey Chris Barrie Marina Zakharova Notes to editors About MegaFon: · Operating market:Russia's telecommunications market was worth RUB1,607 bn in 2011 (according to AC&M Consulting, Direct-INFO). Itswireless telecommunications industry is the largest in Europe with c. 230m subscribers as at 30th September 2012 (according to AC&M), underpinned by strong GDP growth and governed by what is at present a relatively benign regulatory framework. · Market position:the Company is Russia's 2nd largest mobile operator in terms of subscribers with c.63m subscribers representing a market share of over 27% as of 30 September 2012, (according to AC&M) and the largest operator in the mobile data segment since 2008, a market which has grown at a CAGR of over 44% from 2009 to 2011 (according to AC&M). · Strong position in promising data and VAS market: The Russian mobile data market is forecast to grow at a CAGR of 21% from 2011-2015 (according to AC&M) with potential for low existing smartphone and 3G penetration to catch up with Western European levels. The Company believes it is well positioned to exploit the potential further growth of the Russian mobile data market as it operates the most extensive 3G network in Russia, offering high performance and service quality. It was the first of the Big Three to offer LTE/4G high-speed mobile broadband data services to its clients and expects to be in a position to offer its LTE/4G services in over 40 cities, including Moscow and St Petersburg, by the end of 2012. Similar room for growth exists in value added services, where the Company aims to develop innovative services and content. · Strong growth record:the Company's consolidated total revenue and operating income before depreciation and amortisation (OIBDA) for the year 2011 amounted to RUB 242.6bn and RUB 100.8bn, respectively, representing a 3 year CAGR since 2009 of 15.5% and 6.9%, respectively. Furthermore, MegaFon's Q3 2012 results demonstrate strong continuing momentum with consolidated total revenue and OIBDA growing by 12.3% and 21.1%, respectively, compared to Q3 2011, with an OIBDA margin of 45.1%, up 2.8 percentage points compared to the previous quarter. · Strong focus on productivity and efficiency: MegaFon is focused on driving higher value data and services revenue growth, while continuing to benefit from lower expected capital intensity going forward, ongoing cost saving and capital efficiency initiatives to optimise potential for cash flow growth. · Attractive shareholder remuneration policy: the Company has approved a dividend policy which sets annual dividends at the higher of (x) 50% of Net Profit or (y) 70% of free cash flow (as set out in its dividend policy), plus a value (which may be negative) corresponding to the net debt capacity of the company within the bounds of its optimal capital structure. This is a net debt-to-adjusted OIBDA ratio (where adjusted OIBDA means the amount of net profit (exclusive of the effect of non-cash items) for the relevant financial period, plus depreciation and amortisation) between 1.2 and 1.5 times. · Highly experienced management team and strong sponsorship from incumbent shareholders: MegaFon's management is highly experienced with a strong industry track record. The Company further benefits from the expertise and insight of our strategic shareholders AF Telecom and TeliaSonera. As part of the Offering, Mr Nyberg, a member of the MegaFon Board of Directors, has communicated to the Company his intention to subscribe for Securities in the Offering at the Offer price in the amount of U.S.$2 million. As part of a long-term incentive plan, Mr Tavrin has agreed to purchase from MegaFon's subsidiary, MICL, a 1.25% interest (7,750,000 shares as at the date hereof) in the Company at the Offer Price within 30 days of Admission. *** These materials are not an offer for sale of securities. Copies of this announcement are not being made and may not be distributed or sent into the United States, Australia, Canada, Japan or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures. These materials are not an offer for sale of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. The issuer of the shares and the GDRs (the "Securities") has not registered, and does not intend to register, any portion of the offering in the United States, and does not intend to conduct a public offering of Securities in the United States. This document is only being distributed to and is only directed at: (A) persons located outside the European Economic Area or, if located within the European Economic Area, that are qualified investors within the meaning of the Prospectus Directive as implemented in the relevant Member State of the European Economic Area; and (B) persons located outside the United Kingdom or, if located within the United Kingdom, persons that are: (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order, (all such persons in (A) and (B) above together being referred to as "relevant persons"). The Securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. Stabilization/FSA. This document is an advertisement and is not a prospectus for the purposes of the "Prospectus Directive". A prospectus prepared pursuant to the Prospectus Directive will be published, which, when published, will be made available in accordance with the Prospectus Directive. Investors should not subscribe for any securities referred to in this document except on the basis of information contained in the prospectus. The expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU, to the extent implemented in any relevant Member State) and includes any relevant implementing measure in the relevant Member State. This document and information contained herein are not a public offer or advertisement of securities in the Russian Federation and are not an offer, or an invitation to make offers, to purchase, sell, exchange or transfer any securities in the Russian Federation or to or for the benefit of any Russian person or entity, unless and to the extent otherwise permitted under Russian law, and must not be made publicly available in Russia. Information contained in this document is intended only for persons who are "qualified investors" within the meaning of Article 51.2 of the Federal Law No. 39-FZ "On the Securities Market" dated 22 April 1996, as amended (the "Russian QIs") and must not be made available to any persons who are not Russian QIs or otherwise permitted under Russian law to access such information. The GDRs have not been and will not be registered in Russia and are not intended for "placement", "public circulation" , "offering" or "advertising" (each as defined in Russian law) in the Russian Federation except as permitted by Russian law. The ordinary shares of Open Joint Stock Company MegaFon are listed on quotation list "V" of CJSC MICEX Stock Exchange. This document doesn't constitute investment advice or a recommendation under Cyprus law, nor does it constitute an offer or advertisement of securities in Cyprus, it is not intended to be and must not be distributed via information distribution channels or to the public in Cyprus, nor (when distributed by a duly licensed investment firm established or operating through a branch in Cyprus) to any person in Cyprus other than a 'professional client' as defined in the law on Investment Services and Activities and Regulated Markets (Law No.144 (I)2007). This document may not be used for any invitation or solicitation purposes for or in connection with the sale, marketing, offering or acquisition of the securities in circumstances under which it is unlawful under Cyprus laws to make such an invitation or solicitation. *** This release includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or "should" or similar expressions or, in each case their negative or other variations or by discussion of strategies, plans, objectives, goals, future events or intentions. These forward-looking statements all include matters that are not historical facts. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. Forward-looking statements are not guarantees of future performance. Many factors that could cause the Company's actual results, performance or achievements to differ materially from those expressed in such forward-looking statements. These forward-looking statements speak only as at the date of this release. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. This information is provided by RNS The company news service from the London Stock Exchange END MSCDMMZMVRNGZZG -0- Nov/28/2012 07:01 GMT
OJSC Megafon MFON Pricing for Initial Public Offering
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