2 November 2011
Ukrtelecom (UTLM UK), which is in the process of selling its mobile division which is the sold holder of a UMTS license in Ukraine, plans to accept bids from prospective buyers until November 25, Supervisory Board Member Georgiy Dzekon said during an EGM yesterday. The company announced its decision to sell its mobile arm in June 2011. Yegor Samusenko: We keep our view that spinning off the mobile business will likely have a positive effect on Ukrtelecom, even if the price is as low as USD 100 mln (in our model, we assume closure of the mobile business by the end of 2012 and sale of the division at the nominal price of CapEx incurred in 2006-2010 of USD 110 mln). Though the effect for minorities will depend on the sale price, we note the company would likely be able to attract cash needed for CapEx to boost its position in broadband. The State Property Fund valued Ukrtelecom’s mobile unit at 6% of its total value, which is UAH 635 mln using the privatization price as a guide.