MegaFon, one of Russia’s top three mobile firm operators, intends to hold an initial public offering (IPO) in Moscow and London in the fourth quarter of this year, MegaFon said on Tuesday, in a flotation which could be worth up to $4 billion.
MegaFon intends to sell up to 20 percent of its stock. The company, one of Russia's “Big Three” mobile operators, will offer ordinary shares on the combined MICEX-RTS Stock Exchange and its common stock and Global Depositary Receipts (GDRs) on the London Stock Exchange.
Finnish and Swedish telecoms giant TeliaSonera plans to sell 10.6 percent of MegaFon's shares on condition it retains 25 percent plus 1 share in the firm while another 9.4 percent will be offered by a MegaFon subsidiary, MegaFon Investments.
"As originally articulated on April 24, depending on the results of the IPO, TeliaSonera may reduce its current 35.6 percent ownership and still keep a long term strategic ownership of at least 25 percent plus one share in MegaFon after the IPO," the company said.
MegaFon will use the IPO proceeds to repay current liabilities and spend funds on general corporate needs, including further development and network expansion, it says.
Morgan Stanley and Sberbank CIB (formerly Troika Dialog brokerage) have been appointed as the IPO global coordinators while Citi, Credit Suisse and VTB Capital will act as joint bookrunners.
MegaFon CEO Ivan Tavrin said the current market environment was the most appropriate time for the IPO, which will represent a new stage in the firm’s development