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Russia’s MegaFon early pays 90% for Scartel

June 09, 2014, 13:05 UTC+3 MOSCOW

MegaFon’s shareholders decided at a meeting on June 5 to sign the extra agreement with Garsdale

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© ITAR-TASS/Zurab Dzhavakhadze

MOSCOW, June 09. /ITAR-TASS/. Russia’s MegaFon, one of the country’s leading mobile operators, has concluded an additional agreement to pay ahead of schedule $1.06 million for 100% in Maxiten co Ltd., owning 100% in Internet company Scartel, working under the Yota brand, from holding Garsdale Services Investment Ltd., MegaFon said in a press release Monday.

MegaFon’s shareholders decided at a meeting on June 5 to sign the extra agreement with Garsdale. The document allows the operator to pay about 90% of the total value of the deal on the acquisition of Scartel.

“(MegaFon’s) excellent operational results and recent successful ruble bond issue resulted in a solid liquidity position. This led shareholders to make the decision to prepay 90% of the Scartel/Yota liability, thus eliminating a sizeable US dollar liability and further reducing our exposure to volatile FOREX markets,” the operator’s CEO Ivan Tavrin said, as cited in the statement.

“We are constantly monitoring opportunities on the debt and FOREX markets in order to manage (MegaFon’s) cash position and hedge foreign exchange risks in an optimum way. We believe, that this transaction validates prudent approach of MegaFon to foreign exchange risk management while allowing for future cash savings due to decreased interest expense,” Tavrin said.

MegaFon acquired 100% in Maxiten on October 1, 2013, and agreed to pay $1.18 million to Garsdale in two equal installments on the first and second anniversaries of the deal’s closing date, or on October 1, 2014, and October 1, 2015, plus interest at 6% per year.

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