Rostelecom to acquire regional operator Norilsk Telecom

Rostelecom to acquire regional operator Norilsk Telecom

Russian carrier Rostelecom has reportedly signed a memorandum of intent to acquire the Krasnoyarsk region’s Norilsk Telecom from investment bank CIT Finance.

Unnamed sources told the Moscow Times that Rostelecom has carried out due diligence on the company and is willing to pay approximately $57 million.

The funds raised through the sale will be used to repay CIT Finances' 46 million ruble debt to Russian Railways, according to the sources. CIT is thought to have faced debt problems since 2008, after it experienced losses in dealing with Rostelecom stock during the financial crisis.

Rostelecom board member, Sergei Azatyan, told the publication that the deal had not yet been considered by the board of directors but added that the group supported Rostelecom’s expansion in promising markets.

Norilsk Telecom was originally setup as a subsidiary of Norilsk Nickel in 2004, before it was sold to executives and CIT Finance in 2008 for $51 million.

After CIT subsequently acquired full control of the company it tried to negotiate sales with several Russian operators, including Svyazinvest, VimpelCom, Transtelecom and Comstar UTS, but failed to reach a deal due to too high an asking price.

Norilsk boasts a pay TV business, and a broadband internet network, in January the company had 62,000 fixed-line subscribers and 12,000 internet subscribers.

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