SCM is rumored to acquire control in Ukrtelecom

Ukraine’s largest business group SCM might become the owner of Ukrtelecom (UTLM UK), Kommersant reported today, citing its own sources. According to the sources, SCM, which already has exposure to telecom market by owning a third-largest mobile operator Astelit and third largest fixed-line telecom Vega, will take control over a holder of Ukrtelecom’s 92.8% stake, Cyprian EPIC Telecom Invest. The deal between Ukrtelecom holders and SCM is still far from being completed, Kommersant sources say.

Alexander Paraschiy: The deal, if completed, will have no effect on Ukrtelecom minority shareholders, as SCM will have no obligation to offer a buyback (because it is going to acquire not Ukrtelecom, but its parent Cyprus-based company). Though, we believe change of an owner of Ukrtelecom will have a positive impact on the company’s fundamentals and thus may lead to an increase of its shareholder value. SCM, an owner of Metinvest (METINV), DTEK (DTEKUA) and First Ukrainian International Bank (PUMBUZ) has proved its ability to develop controlled assets, while its current position in telecom segment is weak due to late entry to the market.