Fintur Holdings B.V. (Fintur), jointly owned by Telia Company and Turkcell, has agreed to sell its 51.3 percent holding in Azertel, sole shareholder of the Azeri telecommunications operator Azercell, to Azintelecom, a company wholly owned by the Republic of Azerbaijan.
“It is satisfying that we are able to announce a joint agreement with Turkcell to sell Azercell in Azerbaijan. This is the fourth divestment in our effort to, over time, leave Eurasia and focus on the Nordic and Baltic regions within the framework of our New Generation Telco strategy. I would like to thank Azercell’s employees for their outstanding contributions and wish them all the best in the company’s next phase,” says Johan Dennelind, President and CEO of Telia Company.
Fintur divests its 51.3 percent holding in Azertel Telekommunikasyon Yatirim Diş Ticaret A.Ş (Azertel) to Azerbaijan International Telecom LLC (Azintelecom), wholly-owned company by the Republic of Azerbaijan. Fintur is owned jointly by Telia Company (58.55 percent) and Turkcell (41.45 percent).
Azertel is sole shareholder of the leading Azeri mobile operator Azercell LLC (Azercell). The agreed price for Fintur’s 51.3 percent in Azertel is EUR 222 million, which implies an equity value of EUR 432 million for 100 percent of Azercell and an enterprise value of EUR 197 million on a cash and debt free basis. The price corresponds to an EV/EBITDA multiple of 2.1x based on 2017.
In addition to the impairment of SEK 2.6 billion recognized in December 2017, accumulated foreign exchange losses of SEK 3.0 billion will be reclassified to net income from discontinued operations, but will have no material effect on group equity. The transaction is on a pro forma basis estimated to increase net debt to EBITDA by approximately 0.1x. The final amounts are subject to changes in carrying values and foreign exchange rates.
Prior to signing the transaction, Telia Company completed strict compliance and purchaser due diligence and is satisfied that all relevant checks and controls have been carried out with satisfactory results.
Azintelecom is a buyer in line with Telia Company’s requirements as it is a company wholly-owned by the sovereign state of Azerbaijan.
The transaction is not subject to any conditions, such as regulatory or competition approvals, and has been completed.