MTS Armenia Viva-MTS earlier Vivacell-MTS, Vivacell - MTS

Viva-MTS (MTS Armenia CJSC) is a 100% subsidiary of MTS PJSC in the Republic of Armenia.

History

2024: Closing of transaction on sale of 100% of MTS Armenia shares to Cypriot group Fedilco

On January 24, 2024, MTS announced the closure of a deal to sell 100% of its subsidiary in the Republic of Armenia - MTS Armenia CJSC (Viva-MTS trademark) - Fedilco Group Limited (Republic of Cyprus).

The perimeter of the transaction also included CJSC MobiDrum, a payment system providing financial services in the Armenian market, a 100% subsidiary of MTS Armenia.

MTS received all the corporate approvals necessary for the transaction, as well as the permits of the regulatory bodies of the Republic of Armenia: the State Commission for the Protection of Economic Competition and the Commission for the Regulation of Public Services.

2023

Approval by the regulator of the sale of the company to the Cypriot group Fedilco

On November 15, 2023, the Commission for the Regulation of Public Services of Armenia (CROU) approved the sale of the Armenian subsidiary of MTS to the Cypriot company Fedilco Group Limited. The financial terms of the transaction were not disclosed.

The fact that the CROY approved the application of MTS Armenia CJSC (Viva-MTS brand, a subsidiary operator of the Russian MTS PJSC) for the sale of the company's shares, the company told. " To Interfax According to the decision of the regulator, the transaction must be closed within six months from the date of publication of the final decision.

Viva-MTS to be sold to Fedilco Group Limited

The Armenian subsidiary of MTS filed an application for the sale of shares in the spring of 2023, and at first the regulator rejected it. A new application was received on November 3, 2023. As a result of the sale of 100% of MTS Armenia shares, it will cease to be part of the MTS group.

Experts interviewed by RBC note that business in Armenia is a "noticeable" asset of the Russian group, but its sale will not significantly affect its performance due to the disparity in scale. According to Konstantin Belov, senior analyst at Sinar Investment Bank, the deal to sell MTS Armenia shares will not have any impact on the group, even if the parent structure completely loses control over the asset, since operations in Armenia in 2022 generated less than 2% of total revenue.

Anna Kupriyanova, head of the share market analysis department at Gazprombank, also notes that the asset in Armenia is not the main asset for MTS.

The group has long been focused on the Russian market, from the point of view of financial indicators, the impact may be extremely insignificant, - said Kupriyanova.

According to her, the value of 100% of MTS Armenia shares may be about 10-15 billion rubles, taking into account the debt, the amount of which is unknown, based on 3-4 EV/OIBDA. She suggested that such an asset may be of interest to local telecom operators.^[1]

Rejection of the request for sale of the company to the Cypriot group Fedilco

The Commission for the Regulation of Public Services of Armenia (CROY) refused MTS in the application for the sale of a local subsidiary to the Cypriot group Fedilco. This became known on April 10, 2023.

According to Interfax with reference to the press service of the CROUE, the Cypriot Fedilco Group Limited intends to acquire from Allegretto Holding (Luxembourg) 100% of the shares of Aramayo Investments Limited (Cyprus), which is the only shareholder of MTS Armenia. Considering that Allegretto Holding belongs to MTS registered in Russia, it was assumed that as a result of the transaction, MTS Armenia will no longer belong to the MTS group.

KROU refused MTS to sell the Armenian subsidiary to the Cypriot group Fedilco

In accordance with the legislation of Armenia, a deal can be refused if it does not meet the requirements of the CROC, threatens or may threaten national security or state interests. Given this, the CRP decided to refuse to conclude a deal. The decision can be challenged in an administrative court within 30 days, the regulator said.

The source Businessman"" in the telecommunications market believes that the decision of MTS to leave the region was provoked MTS bank by the sanctions imposed in February 2023 USA and. At Great Britain the same time, according to the interlocutor, the Armenian market "did not bring MTS noticeable income." According to the company's reports, revenue in Armenia in 2022 increased by 4.1%, to 51 billion drams (9.7 billion), rubles while the group's total revenues amounted to 541.7 billion rubles.

The source of the newspaper says that the expansion of MTS and other Russian operators in the CIS and other countries was unsuccessful.

These markets are very specific, connections are of great importance there, which is why it is extremely difficult to conduct business. Leaving Armenia was a matter of time, sanctions against MTS Bank only became a catalyst, he said.[2]

2022

Appointment of Armen Avetisyan as CEO

The Board of Directors of MTS Armenia CJSC "" (Viva-MTS) appointed Viva-MTS CEO from June 15, 2022. Armena Avetisyana More. here

Number of employees and subscribers

As of 2022, the company employs 1,200 employees; the number of subscribers exceeds 2 million.

2011

On November 28, 2011, it became known that Mobile Television Systems (MTS) provided a loan of $90 million to a family of Lebanese entrepreneurs Pierre and Musa Fattouche, who are co-owners of the MTS-owned Armenian mobile operator Vivacell-MTS (Vivacell trademark - MTS). At the same time, MTS extended until 2016 two option agreements for the redemption of 20% of Vivacell-MTS shares from the Fatushi family^[3]

In 2007, MTS acquired from Fatushey an 80% stake in International Cell Holding, an offshore company that owns a 100% stake in Vivacell-MTS, for 260 million euros ($361.1 million), paying another 50 million euros ($69 million) over the next three years. At the same time, the parties entered into call- and put-options for the remaining 20% of the shares. The first of them allows MTS to buy this package, the second gives Fatush the right to sell MTS shares. Initially, both option agreements expired in 2012.

According to the new agreements, if the call-option is exercised, MTS will be able to offset the remaining outstanding amount of the debt by Fatushi. And Fatushi's put-option will be able to realize only after the loan is paid. A source close to the transaction explains that in this way MTS helped business partners and at the same time respected its interest, since the loan serves as an advance payment for the option. The amount of exercise of options should be determined based on the market value of the block of shares at the date of the transaction within 200 million euros.

A source in one of Vivacell-MTS 's competitors explains Fatusha's desire to receive money from MTS, while remaining the company's shareholders, the political ambitions of its CEO Ralph Yirikyan. Yirikyan himself was born into an Armenian family in Lebanon, in 2001 he came to the unrecognized Nagorno-Karabakh Republic (NKR) friendly to Armenia and headed the Karabakh-Telecom telecommunications operator created by Fatush.

Now Vivacell-MTS are the only MTS subsidiary in countries in CIS which the Russian company did not change management after acquiring the asset. The interlocutor CNews notes another feature of this company - it spends more than other operators of the MTS group on charity, and the source of this money may be funds collected by the Armenian community in Lebanon. For example, "Vivacell-MTS" finances the construction of housing for those in need and the reconstruction of socially significant facilities, the construction of the Park of Armenian-Russian Friendship and the Monument to the Russian Soldier, sponsors the award of the President of Armenia in the field of IT. Its laureates were Craig Barrett (former head, Intel now co-chairman of the Foundation Council "") and Skolkovo co-founder Apple Steve Wozniak , etc.

"Vivacell-MTS" is doing a lot of work in the field of charity and actively advertises its activities in the media, which served as the basis for rumors about Ralph Yirikyan's political ambitions, "said Karen Arzumanyan, columnist for the Armenian weekly Business Express. According to the Armenian publication Hayinfo, ex-president Robert Kocharian may nominate Yirikyan for the upcoming presidential elections in 2013. MTS declined to comment on Yirikyan's political ambitions and the spending of "Vivacell-MTS" on charity.

2009

In August 2009 MTS PJSC acquired the remaining 20% of VivaSell shares.

2007

In September 2007, after the sale of 80% of the shares, VivaSell became a subsidiary of one of the largest telecommunications companies in the CIS - the Russian company Mobile TeleSystems (MTS). In parallel with the new strategy, the definition of goals, the formulation of a common corporate mission, an updated organizational structure of the company is also being developed.

2004

In 2004, the Armenian authorities deprived Armentel and its then owner, Greek OTE, of an exclusive cellular license by issuing Vivacell-MTS license. This gave rise to rumors in Armenia that the then President of the Republic Robert Kocharian (formerly President of the NKR) and Minister of Communications and Transport Andronik Manukyan had their interest in the company.

Notes