MTS Snaps Up Ukraine Carrier

Moscow's Mobile TeleSystems expands into Ukraine by purchasing a majority interest in Ukrainian Mobile Communications

November 18, 2002

1 Min Read

MOSCOW -- Mobile TeleSystems OJSC ("MTS" - NYSE:MBT) has signed an agreement to purchase a majority interest in Ukrainian Mobile Communications ("UMC"), a leading mobile operator in Ukraine, with over 1.5 million subscribers. MTS, Russia's largest mobile operator, has signed agreements with all the existing shareholders of UMC, providing for the acquisition of a 57.7% stake in UMC for $194.2 million. According to the agreements, MTS will purchase a 16.3% stake from KPN; 16.3% from Deutsche Telekom, and 25% from Ukrtelecom. In addition, MTS has entered into a put and call option agreement with TDC for the purchase of its 16.3% stake. The exercise period of the call option is from May 5, 2003 to November 5, 2004 and the put option is exercisable from August 5, 2003, to November 5, 2004 and is subject to a minimum price of $55 million. MTS also has an option agreement with Ukrtelecom to purchase its remaining 26% stake, exercisable from February 5, 2003 to November 5, 2005, with an exercise price of $87.6 million. If all options are exercised MTS will own a 100% stake in UMC.UMC is a leading mobile operator in Ukraine offering services to over 1.5 million subscribers. The company operates under nationwide GSM 900/1800 and NMT 450 licenses. Ukraine has a population of 49.3 million. According to UMC's audited results prepared under International Financial Reporting Standards (IFRS), the company's revenues in 2001 were $215.8 million, EBITDA was $100.7 million, and net income was $44.3 million.As part of the transaction, MTS will guarantee UMC's loans from its current shareholders totaling $58.1million. Mobile TeleSystems OJSC (MTS)Ukrainian Mobile Communications (UMC)

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