VimpelCom Said to Hire UBS, TAP for $5 Billion Mobile-Tower Sale

  • Phone towers under consideration include Russia, CIS countries
  • Italian unit agreed to sell towers to Abertis in March

VimpelCom Ltd. has lined up banks and advisers including UBS Group AG,  Bank of America Corp.’s Merrill Lynch and TAP Advisors as the carrier explores options including a sale or an initial public offering for about 50,000 phone towers including in Russia and former Soviet Union republics, according to people with knowledge of the matter.

Russia’s third-largest wireless carrier is seeking to raise funds and reduce costs and debt from a disposal of the portfolio, which could be valued at more than $5 billion, the people said, asking not to be identified because the deliberations are private. VimpelCom could still decide against any deal, the people said.

Amsterdam-based VimpelCom, co-owned by Russian billionaire Mikhail Fridman and Norway’s Telenor ASA, operates in 14 countries including Russia, Italy and Pakistan. VimpelCom shares declined 6.9 percent to $3.76 on Wednesday in New York.

Representatives for UBS, TAP and Bank of America declined to comment.

“We continue to monitor trends in the global telecoms market and looking at effective business models for tower infrastructure, which help reduce costs and construction time, aid geographical expansion and increase quality for consumers at an attractive price,” VimpelCom said in an e-mailed statement.

Industrial Partner

Another alternative for VimpelCom is to create a holding company with an industrial or financial partner, the people said. The operations under discussion include markets such as Russia, Ukraine, Kazakhstan, Armenia, Kyrgyzstan, Uzbekistan, Tajikistan and Georgia.

“VimpelCom’s management has focused on cost reduction and selling the towers is a good opportunity to do that,” Alex Kazbegi, an analyst at Renaissance Capital, said by phone. “Russian carriers haven’t looked at this previously because they viewed their network coverage as a competitive advantage.”

In March, VimpelCom’s Italian unit agreed to sell a stake in its towers to Abertis Infraestructuras SA for 693 million euros ($784 million). Abertis is also considering an offer for a stake in Telecom Italia SpA’s tower business Inwit SpA, people familiar with the matter said last month.

VimpelCom is seeking to boost cash flow by $750 million within three years through cost reductions and exiting smaller markets, Chief Executive Officer Jean-Yves Charlier said in August.

The company may come under pressure in the lucrative wireless market in Moscow after T2 RTK Holding, a discount carrier backed by the government and a billionaire ally of President Vladimir Putin, starts services there Thursday.

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