MTS purchased VivaCell

PanARMENIAN.Net - Mobile TeleSystems OJSC (MTS), the largest mobile operator in Russia and the CIS announced the acquisition of a 80% stake in International Cell Holding Ltd, 100% indirect owner of K-Telecom CJSC, Armenia's largest mobile phone operator, as well as signing of a call and put option agreement for the remaining 20% stake to be exercised no earlier than July 2010.



K-Telecom CJSC operates under the VivaCell brand in the GSM-900/1800 standard covering the entire territory of Armenia. The license is valid until the end of 2019.



The sale and purchase agreement stipulates that MTS will pay 310 million euros for 80% of K-Telecom of which 50 million euros will be paid out to the sellers in the course of three years from 2008 to 2010 provided certain agreed financial targets are met by K-Telecom. At the same time, MTS will extend a 140-million euros technical loan to the company to refinance existing loan facilities and for further investments. The price for remaining 20% option stake will be determined by an independent investment bank.



K-Telecom was founded and has been operated by the Fattouche family, a prominent Lebanese investment group.



"This acquisition fully complies with our strategy to capture growth opportunities in the fast growing CIS markets. Armenia becomes our sixth country of operations in the CIS. We are pleased to gain entry into this existing market by partnering with the market's leading mobile operator," said President and CEO of MTS, Mr Leonid Melamed.



"We remain committed to Armenia's potential and also to K-Telecom's development and the consolidation of its leading position in the market. Looking ahead, we see great growth prospects, enhanced through our partnership with a leading wireless operator such as MTS," highlighted Mr Pierre Fattouche.



For his part, K-Telecom's General manager Mr Ralph Yirikian stated, "We are pleased to join forces with MTS and to integrate our team within MTS regional workforce. We will be better positioned to offer our subscribers more choices, more innovative services and solutions, addressing their needs and requirements."



MTS operates in Russia, Belarus, Ukraine, Uzbekistan and Turkmenistan and has 78,54 million subscribers.