Synterra of Synterra

History

2006: PromSvyazKapital purchases Sinterra

The Synterra company was purchased by the PromSvyazKapital group in 2006 as the perspective portfolio investment.

2007: A loan Sberbank of $281.7 million for 4 years on the security of 66% of the stocks and 66% of stocks of Peterstar

In June, 2007. Occupied Synterra Sberbank of $281.7 million for four years, as providing on this credit serve 66% of stocks of Synterra Ltd and 66% of stocks of its "subsidiary" of PeterStar, said in the reporting Sinterra for 2008.

2009

PromSvyazKapital put 50% of stocks MTT on the credit of Sinterra in Sberbank

In December, 2009 PromSvyazKapital put 50% of stocks of the second in number of subscribers of the operator of an intercity and international telecommunication — MTT in Sberbank under the credit line in 1.6 billion rubles opened its other "daughter", Sinterr. It is said in the reporting Sinterra for the first half of the year 2009 Sberbank provided it in August a three-year credit line on 1.6 billion rubles. The rate is 17.5-18.5% (depending on financial results of the company). The loan is provided with fiber lines of communication and the equipment of Sinterra on 1.07 billion rubles and 50% of stocks MTT. A packet in MTT, as well as 100% of Sinterra, at that time belonged to "subsidiary" of PromSvyazKapital of Synterra Cyprus Limited.

Proceeding from the last messages Sinterra the cost of construction of 1 km of optical fiber costs it 450,000-500,000 rub, the development director of Frost & Sullivan Tatyana Tolmacheva therefore she of Synterra could put 2000-3000 km of network in Sberbank notices. The average market price of 1 km of optical fiber is 200,000 rub, i.e. the company could put up to 5000 km, the analyst of iKS-Consulting Konstantin Ankilov adds. Representatives of Sinterra claim that more than 75,000 km, but what part of this network is rented — do not disclose the extent of its network.

PromSvyazKapital put 25.01% of Sinterra for loan security in Unicredit Bank

PromSvyazKapital "put 25.01% of Sinterra "for providing the credit agreement" with Unicredit Bank, said in the reporting Sinterra for the first half of the year 2009. The credit of $152 million under which stocks of the company are put was received in April, 2008. The rate on it is LIBOR + 3.75-6.25%, a repayment period — October, 2011. A total debt of Sinterra for June 30 — 12.66 billion rubles (about $435 million), and Unicredit Bank — the largest creditor.

To bank the fact of existence of pledge that the credit was considered as secure was important and "by this criterion did not differ from the credits taken by us in other banks". Taking into account pledge in Sberbank in pledge at banks of 91% of Sinterra.

Opening of the first commercial DPC in Kazan with investments about 100 million rub

In September, 2009 announced Synterra opening in the Republic of Tatarstan of the first commercial center of data processing. Investments of Sinterra into creation of DPC made about 100 million rubles.

DPCs of Sinterra are united in the single distributed national network of the company. The network includes seven data centers – in Moscow, Murmansk, Novosibirsk, Stavropol, Kazan, Krasnodar and Tomsk which total area on a raised floor reached 2.5 thousand sq.m.

The DPC in Kazan occupies the premises total area on a raised floor of 255 sq.m planned taking into account all international and Russian requirements to modern data centers and provides high-speed redundant connection of 50 Gbps with national telecommunication infrastructure of Sinterra and republican infrastructure of Tattelecom with a possibility of further expansion. Capacity of the first stage of new DPC is expected 48 standard server racks (about 2000 servers), power supply (1 group special category) is organized from two independent sources with power about 600 KW/hour. The uninterrupted operation of functioning of DPC is maintained by the hi-tech systems (the guaranteed power supply, independent temperature and moist control, fire protection, remote monitoring of the engineering systems and the security system including including, video status monitoring of each unit of the installed customer premise equipment).

The joint venture of Sinterra and Tattelecom will become operator of DPC in the Republic of Tatarstan – the Synterra Tattelecom company which was created in February, 2009 is going to enter DPC as a share of Sinterra to the authorized capital of joint venture.

The joint program of Synterra and Microsoft Group for creation of the all-Russian Distribution center of media content announced in June, 2009 will become the first large-scale project implemented based on the Kazan DPC. She assumes implementation of the hardware-software solution based on Microsoft Mediaroom for the benefit of all Russian operators of broadband access interested in development on the IPTV networks. Synterra Media in this alliance will act not only as the owner of the platform, but also as the supplier of video content for the benefit of the small operators of broadband access attached to a system.

To Russian regions Synterra will provide for ensuring delivery of heavy video content to regional operators of power of the national backbone network.

Also based on the Kazan DPC of Synterra Tattelecom outsourcing of ICT services as the anti-recessionary instrument of optimization and increase in efficiency of use of ICT at the enterprises of Tatarstan and the Russian Federation will develop. According to Sinterra, at placement of the IT nodes in DPC the federal and local companies, telecom operators and IPTV, TV companies, content providers, scientific educational institutions and government institutions receive not only economy of means due to outsourcing engineering IT and telecommunication infrastructure, but also access to operator services of Synterra and Tattelecom companies (long distance services, leases of intercity channels, services based on IP-MPLS network, Internet access, services of the distributed call center, a hosting, colocation and so forth).

2010

Preparation of the transaction on sale to the company to MegaFon

On June 1, 2010 MegaFon and PromSvyazKapital are going to sign the transaction on purchase of Sinterra for $745 million. Meanwhile on this asset the new applicant - Rostelecom nearly appeared.

That the agreement can be signed on June 1 Vedomosti was told by two managers close to both parties of the transaction. At the end of the last week its parameters were approved by Board of Directors of MegaFon, having estimated 100% of Sinterra at $745 million (including $350 million a debt). The transaction is ready to signing in the nearest future, the board member of Sinterra and the consultant of its owner — the PromSvyazKapital group Artur Akopyan says. According to him, not all amount will be paid at once: about 1/4 amounts is necessary on deferred payments, a part from which can be cancelled in case of approach of risks.

Terms of transaction selling Sinterra to MegaFon were studied very long and all possible risks are considered, Akopyan says. One of such risks – loss of 11,500 km of dark fibers (wires without the connected equipment) which Synterra rents at Rostelecom. Recently the state operator refused to lease them Sinterre, having accused it of 100-day delay of payments on 21.6 million rubles. The letter on agreement cancelation came to Sinterra soon after the offer to enter negotiations on purchase, the representative of Sinterra Ekaterina Andreyeva says. Yesterday Rostelecom sent the new letter (is at Vedomosti) confirming a rupture of the lease agreement to Sinterra.

The size of deferred payments is tied also to financial performance of Sinterra, adds a source in MegaFon. They can worsen if Sinterr it is not possible to receive a number of government contracts, he assumes. In this case the total sum of the transaction will make about $720 million, tells a source.

MegaFon conducted negotiations with PromSvyazKapital on purchase of Sinterra since the beginning of 2009. In February, 2010 the Board of Directors of mobile operator approved the transaction on the price of $705 million (including a debt), but then shareholders of Sinterra managed to achieve advance in price. Initial assessment became proceeding from pessimistic financial forecasts: it was supposed that revenue of Sinterra in 2009 will decrease by 40%. But in practice revenue of Sinterra remained at the level of 2008.

Originally also Comstar-OTS and VimpelCom applied for Sinterra, but as a result both changed mind to make the transaction. Only yesterday it became clear that negotiations on purchase of Sinterra were nearly entered by one more applicant — Rostelecom under control of Svyazinvest state holding. A few weeks ago the CEO of Rostelecom Anton Kolpakov sent to the CEO of Sinterra Vitaly Slizen the letter with the offer to begin negotiations on purchase of this company, told sources in Sinterr and Rostelecom and the representative of PromSvyazKapital Darya Lytvyna confirmed. According to them, Rostelecom estimated Sinterra approximately at five of its EBITDA plus a debt, i.e. at $785 million. Before Rostelecom never showed interest in Sinterra so the present offer was surprising, the manager close to shareholders of Sinterra notes.

But soon after the first letter to Slizen the second, canceling offer to enter negotiations was directed, approves a source in Rostelecom (the copy of the letter of May 27 is at the disposal of Vedomosti). Now Rostelecom is not interested in Sinterra as subject to purchase, the representative of Rostelecom Oleg Rumyantsev claims. And the source in one of the companies of Svyazinvest adds: the transaction was not planned and before, Rostelecom wanted to carry out only due dilligence of Sinterra to have an idea of business of the competitor. Lytvyna and Akopyan say that the letter on a withdrawal of the offer was not seen yet. Will not influence the transaction with MegaFon of action of Rostelecom, are solidary the manager of PromSvyazKapital and the source close to shareholders of MegaFon. MegaFon refused official comments.

The company is sold to MegaFon for $745 million taking into account a debt of $350 million

On June 3, 2010 it became known that PromSvyazKapital and MegaFon signed the purchase agreement of 100% of trunk operator "Synterra" for $745 million taking into account a debt of Sinterra (about $350 million). Is going to pay MegaFon several tranches. Upon the demand of MegaFon of Synterra suspended the placement of exchange-traded bonds on 5 billion rubles planned for June 3, 2010.

At this time the Synterra group integrates the companies:

• Synterra,
• PeterStar,
• Synterra Urals,
• Synterra South,
• Synterra Siberia,
• Synterra Center,
• Synterra Volga,
• Synterra Caucasus,
• "The Synterra - the Far East",
• Synterra Media,
• "Teleport of SPb" and number of regional telecom operators.

The companies of the Synterra group own licenses for provision of services of telephony in 22 regions of the Russian Federation, data services and lease of channels in all territory of the Russian Federation and also control more than 50% of the Russian market of services of operator Internet access.

3 billion rub according to government contracts are received

In 2010 revenues of the company from communication provision of services to state agencies were 3 billion rubles, in B2B segment - 2 billion rubles, and in B2O - 5 billion rubles (data transmission and lease of channels). According to forecasts, revenues of the company in segments of B2O and B2B in 2011 should increase by 31% and 40% respectively.

The national telecom operator of Synterra on the basis of the tenders held at the end of 2010 signed with the state customers over 50 large contracts for communication services provision in the territory of all Russian Federation. Total amount of contracts was about 1.3 billion rubles. In 2011 a number of government contracts were won on communication services which already rendered to Synterra in 2010. Organized data networks will continue to function for such government institutions as Federal State Statistics Service, the Prosecutor General's Office of the Russian Federation, Federal Service for State Registration, Cartography and Cadastre and also for special consumers - the departments ensuring safety and defense capability of the country. At the same time the volume of the services rendered by Sinterra to these ministries and departments in 2011 increased in comparison with previous year.

Besides, the company will continue to participate in project implementation, carried out in all territory of Russia, on providing with Internet access handicapped children and houses nursing homes.

Also based on tenders of Synterra organized data networks to the state customers, new to the company, and renders communication services for the State Duma of the Russian Federation, Federal Tax Service of the Russian Federation, the Ministry of Economic Development, the Ministry of Finance, Federal Drug Control Service, the Supreme Arbitration Court, Federal Bailiff Service and others.

The majority of contracts is signed according to the results of open tenders where Synterra participated along with other large players of the telecommunication market. Sharing of resources of MegaFon having extensive experience in the solution of important infocommunication tasks for state structures, and Sinterra allowed the united company to expose the best offers on price relation, service quality and terms of their implementation.

2011: The company is attached to MegaFon

In March, 2011 the Board of Directors of OJSC MegaFon made the decision on reorganization in the form of accession of Synterra Ltd and JSC The Northwest Company on Telecommunications and Information Science to OJSC MegaFon.

The Synterra company since January, 2012 will begin to provide communication services under a brand MegaFon. Integration with Sinterra already allowed MegaFon to increase the number of government contracts by 1.5 times. According to plans, revenues of the united company in B2G segment in 2011 will increase by 40%.

Consolidation of backbone networks and IT infrastructure of MegaFon and Sinterra, regional branches is complete and also uniform approach to the organization of the main business processes is implemented. As universal operator "MegaFon" offers a full range of telecommunication services to all types of client segments of B2C, B2B, B2G and B2O. For work in the markets of B2G and B2O and also work with large corporate clients in the company answers created in the spring of 2011. Management on development of federal corporate sales and operator business.

For the purpose of improvement of technologies and quality of the rendered services MegaFon starts the large-scale project "Universal Operator" assuming construction of own access networks in 2.6 thousand the district centers of the Russian Federation. According to the project plan, the communication line, first of all, will be laid to branches and departments of already serviced state customers, reported in MegaFon. The service portfolio of the universal operator in full included offers of MegaFon and Sinterra that allowed at the end of 2010 to increase the number of public contracts in comparison with 2009 by 50%. In turn, strategic plans of MegaFon in business market are connected with active implementation of convergent products, development of programs of loyalty and acquisition of regional operators. It, as expected, will allow the united company to increase the share in B2B and to increase income in this segment by 40% at the end of 2011.

MegaFon has all necessary technical resources for rendering a full range of the telecommunication services including mobile and fixed connection, Internet access, lease of communication channels, the organization of VPN networks, creation of convergent offers, outsourcing of DPC and TsOV, confidential communication and also the innovation services among which It should be noted services in information security (protection of dedicated servers against DDoS attacks) and also services based on Cloud Computing: solutions based on SaaS (providing access to the software as independent service), IaaS (providing infrastructure as service).