Sistema CEO Seeks Acquisitions While Considering IPO PlansLyubov Pronina and Stephen Bierman
Billionaire Vladimir Evtushenkov’s holding company AFK Sistema is looking at 15 potential acquisition targets in its search for new business, while it moves toward initial public offerings for some units, Chief Executive Officer Mikhail Shamolin said.
“We are looking at 15 assets, 15 deals in the pipeline in an active phase in different businesses,” Shamolin said in an interview at the World Economic Forum in Davos. Sistema will consider businesses ranging from agriculture to railways, the pharmaceutical industry, medicine and the Internet, he said.
The company requested information on Latvia’s telecommunications operator Lattelecom SIA “as we know there will be privatization, it doesn’t mean we will buy it, we’re not even close to this decision, but want to study the opportunity, what the price is, what the company is like,” Shamolin said. “So far we see there is no real synergy in telecommunications business between companies in various geographies.”
Sistema, which controls Russia’s largest wireless operator OAO Mobile TeleSystems, doesn’t see much risk to its business from a new nationwide mobile operator, which is being formed in a merger of state-run OAO Rostelecom’s wireless assets with Tele2 Russia, Shamolin said.
Sistema, based in Moscow, still has plans to sell shares representing as much as 25 percent of oil producer OAO Bashneft in the autumn, Shamolin said. “Whether we decide to do it or not will depend on the market,” he said. “The company is ready, but we will see how the market behaves.”
The Sistema boss said that there were no plans to sell Bashneft to OAO Rosneft, as Russia’s largest oil producer, which made several acquisitions last year, had not expressed interest.
An IPO for Sistema’s Detsky Mir children’s goods retailer is a probability and while a decision hasn’t been taken, it could be this year, Shamolin said.
Sistema’s Medsi private-clinic chain has had “phenomenal” earnings growth and won’t have an IPO this year, he said. Sistema is looking for a partner for the unit and wants to expand it by five to 10 times within three to five years, Shamolin said.
The Sistema CEO confirmed interest in Russia’s Investlesprom paper producer, while denying a report that Sistema was ready to invest 1 billion euros ($1.4 billion).
“The information that we plan to invest 1 billion euros isn’t correct,” Shamolin said. “It wasn’t discussed and wasn’t considered. It’s absolutely not true.”
Russian newswire Interfax reported on Jan. 21 that Sistema was seeking to buy the paper producer, citing the Karelia regional administration’s press office.