Thursday, March 28, 2013

Tele2 sells Tele2 Russia

Highlights from this transaction, which didn't come unexpectedly after the company wasn't able to secure a 3G or 4G license (hence no data). In 12Q4, Russia was the largest contributor to the Group's revenue with 30%. Next to be sold Croatia?

There is a different reason why the sale is no big surprise. Less than two months ago Jere Calmes was appointed CEO of Tele2 Russia. His LinkedIn profile states that in 2012 he briefly was MD of Fast Lane Ventures in Moscow, while being a board member at Tele2. VTB, to which Tele2 Russia is sold, is a strategic partner of Fast Lane Ventures. Kinnevik is also a Fast Lane partner.

  • Tele2 Russia: 22.7m subs; 3500 employees; rev 2012 SEK 13.0 bn, EBITDA SEK 4.7 bn.
  • Sells Tele2 Russia to VTB Group, for $2.4bn (SEK 15.6 bn) in equity value + $1.15 bn (SEK 7.5 bn) in net debt, equivalent to 4.9x EBITDA 2012; capital gain SEK 15.6 bn.
  • Plans capital distribution SEK 12.5 bn = 28 SEK/share via share redemption.
  • Core markets are now Sweden, Norway, NL, Kazakhstan.
  • New guidance (first time on Group level): rev CAGR 2013-2015: 5-7% to SEK 35.6 bn; EBITDA CAGR 2013-2015: 10-12% to SEK 8.3 bn; ROCE minimum 20% per country (was 24%); target net debt/EBITDA 1.25-1.75; div 2012 remains SEK 7.10.
  • Opportunities to co-build in NL.
  • Motto: "Tele2 - a European mobile operator - Mobile is our strategy"

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