Under terms of the transaction (“Transaction”), as earlier announced at: https://corp.megafon.com/press/news/20180508-0918.html, MegaFon initially contibuted 11,500,100 Class A shares in Mail.Ru Group Limited (LSE: MAIL.LI) (“Mail.Ru”), representing a 5.23% economic share, and providing 58.87% of votes, to MFT. For the purpose of the Transaction, 11,500,100 Class A shares in Mail.RU Group, comprising a 100% stake in MFT, were valued at US$ 450 million.
Lefbord Investment Limited, a 100% subsidiary of MegaFon and the current shareholder of MFT has sold earlier today a 35% stake in MFT to Gazprombank and a 9% stake — to USM Holdings. Rostec has acquired a 11% stake in MFT. In the result of the Transaction, Lefbord will own the remaining 45% of MFT. The Company will secure US $247.5 million in cash from the sale of 55% shares in MF Technologies pre-tax, and will be used to finance capital expenditures of MegaFon as well as to repay the Company’s debt and, accordingly, reduce the leverage.
The creation of a joint venture by leading businesses in key sectors forming the infrastructure for the digital economy will allow the partners to efficiently develop cross-industry innovation projects including, but not limited to, blockchain- and internet of things-based solutions. Making active use of the relevant expertise and financial capacities of Gazprombank, the partners will also focus on developing digital financial platforms.
“The creation of MF Technologies is a natural step in the implementation of our corporate strategy which aims to achieve the ambitious goal of digital leadership. The newly created joint venture will gain access to its partners’ experience and resources, which will create a platform for the implementation of innovative fintech solutions. While preparing the transaction we have analyzed all the aspects of the new structure with international legal consultants and believe it is the optimal solution for all participants. All partners in MFT agree that the creation of MFT will not impact the independence, corporate governance, procedure or business strategy of Mail.ru and its management team” commented Sergey Soldatenkov, the CEO of MegaFon.
“We are confident that together with our partners in MFT we can contribute to the ongoing growth of the digital economy. We are happy with Mail.Ru Group’s existing strategy and fully support both the corporate governance structure of the company as well as current management. We continue to see opportunities to cooperate in the distribution of financial services for the users and in b2b solutions to the best interest of all partners of the joint venture. Any cooperation will be based on fully commercial terms with a view to strengthening Mail.Ru Group’s product offering and growing capitalization”, — stated press-office of Gazprombank.
“Direct and portfolio investments in growing tech projects arranged with various business partners is a part of Rostec’s corporate strategy. Rostec is a leader and key participant of the Research expertise and technological leadership working group as part of the Government Digital Economy Program. Accordingly, our partnership with other MFT partners will enable us to share our experience in development and adoption of digital technologies”, Rostec press-office commented.
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Notes to Editors
MegaFon PJSC is a leading Russian integrated telecommunication service provider, operating in all segments of the telecommunications markets in Russia, and in the Republics of Abkhazia, South Ossetia and Tajikistan. MegaFon is a recognized market leader in the provision of mobile data services, was the first operator in Russia to launch commercial operation of a third generation (3G) network and was the first operator in the world to launch commercial operation of an LTE-Advanced (4G) data network. MegaFon is traded on the Moscow Exchange and the London Stock Exchange under the symbol MFON. Additional information about MegaFon and the products and services provided by MegaFon can be found at: http://www.megafon.ru
USM Holdings Ltd (USM) is a diversified international company with significant interests across the metals and mining, telecoms, internet and media sectors. USM’s assets include Metalloinvest, a leading global metals and mining company, MegaFon, one of the fastest-growing international telecommunications operators and the largest provider of mobile data services, Mail.Ru Group, the Russian internet and social network leader. USM’s main shareholders are Alisher Usmanov, Vladimir Skoch and Farhad Moshiri.
Rostec Corporation is a Russian corporation that was established in 2007 to facilitate the development, production and export of high-tech industrial products designed for civilian and military applications. The Corporation comprises over 700 organizations that are currently part of eleven holding companies operating in the military-industrial complex and three holding companies working in civilian industry, as well as 80 directly managed organizations. Rostec’s portfolio includes well-known brands such as AVTOVAZ, KAMAZ, Concern Kalashnikov, Russian Helicopters, VSMPO AVISMA, UralVagonZavod, etc. Rostec companies are located in 60 constituent entities of the Russian Federation and supply products to the markets of more than 70 countries.
Gazprombank has successfully operated in the banking market since 1990. Founded by the world’s largest gas producer and exporter Gazprom to provide banking services for gas industry enterprises, Gazprombank has since become a leader in the banking sector, which key performance indicators place the Bank among the top three banks of Russia. Gazprombank as a universal financial institution delivers a wide range of banking and investment services for over 45,000 corporate and about 5 million private clients. Gazprombank invests and lends to companies in major sectors of the economy — oil and petrochemical industry, metallurgy, machine building, electric power industry, real estate construction, transport, telecommunications and trade. Diversified client base enables a strong growth of a corporate loan portfolio and the retail business also shows sustainable growth. Despite of a rapid growth of the loan portfolio, efficient risk policy and prudent approach to borrowers allow the Bank to maintain a ratio of problem and non-performing loans at the lowest level among the largest Russian banks. Steady growth and high reliability were rewarded with ratings assigned by international rating agencies: Moody’s Investors Service, Standard & Poor’s etc.
Mail.Ru Group — international brand My.com (MAIL.IL, listed since November 5, 2010) is the largest internet business in Russia in terms of total daily audience (Mediascope Web Index, Russia, population aged 12-64 in the cities 100,000+, February 2018). Mail.Ru Group is developing an integrated communications and entertainment platform. The Group owns Russia’s leading email service and one of Russia’s largest internet portals, Mail.Ru; three of the major Russian language social networks, VKontakte (VK), Odnoklassniki (OK) and Moi Mir (My World); Russia’s largest online games, including such titles as Warface, Armored Warfare, Skyforge and Perfect World; and instant messaging services ICQ, Agent Mail.Ru and TamTam. The Group operates two largest food delivery businesses in Russia, Delivery Club and ZakaZaka, a location-based marketplace Youla, an auto classifieds service Am.ru, a cross-border marketplace Pandao and a ride-sharing service BeepCar. The Group owns Pixonic, a mobile games developer, and ESforce, one of the largest eSports businesses globally. The Group’s portfolio also includes a leading OpenStreetMap-based offline mobile maps and navigation service MAPS.ME and a controlling stake in GeekBrains, an online education platform for developers. In addition, Mail.Ru Group holds equity stakes in a number of small venture capital investments in various Internet companies in Russia, other CIS countries and Israel.
Mail.Ru Group is actively involved in IT education in Russia and has a number of education centers in partnership with major Russian universities. Mail.Ru Group also holds Russia’s most important programming contests.
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