Transaction reflects a total enterprise value of RUB70.65bn (approximately USD970 million) and an EV/EBITDA multiple of 11.7×2021E

Moscow, 6 September 2021 — Group of companies «Service-Telecom», an independent operator of wireless telecommunications infrastructure, announces today that it has reached an agreement to acquire mobile network towers in Russia of VEON Ltd. (NASDAQ: VEON, Euronext Amsterdam: VEON), a leading global provider of connectivity and internet services, for a total consideration of RUB70.65bn (USD970million equivalent).

The transaction involves the acquisition of 100% of National Tower Company («NTC»), a subsidiary of VEON, which owns a portfolio of approximately 15,400 mobile network towers in Russia. As a result of the transaction, the total portfolio operated by Service-Telecom will be about 18,000 sites.

Under the terms of the deal, PJSC VimpelCom and Service-Telecom have entered into a long-term master agreement regarding the provision of tower infrastructure services for an initial period of 8 years, and multiple extensions of 8 years at the discretion of PJSC VimpelCom. Both parties will additionally enter into a new build-to-suit program comprising of up to 5,000 sites by 2029.

The purchase price for the transaction of RUB70.65bn (USD970m equivalent) corresponds to an EV/EBITDA multiple of 11.7×2021 based on projected EBITDA of NTC post-completion.

The transaction is subject to customary regulatory approvals and closing is expected to take place in the fourth quarter of 2021.

Service-Telecom CEO Nikolay Berdin noted:

«The agreement reached with VEON is a key achievement for Service-Telecom on its way to becoming the leading telecommunication infrastructure operator in Russia. With PJSC VimpelCom, as our partner, we expect to drive sustainable long-term growth in Russia while constructing the infrastructure backbone of the digital economy and helping to enhance mobile broadband connectivity for consumers. The transaction is financed with the support of Gazprombank whereas investment and legal advice are provided by Aspring Capital and Freshfields Bruckhaus Deringer LLP respectively».

Commenting on the transaction, Kaan Terzioglu, VEON’s Chief Executive Officer, said:

«Today’s transaction is a major step forward in realising the value of VEON’s infrastructure portfolio for our shareholders. By entering into a long-term partnership with a strong, experienced counterparty in Russia, Beeline will enjoy the operational and financial flexibility to serve its customers with market-leading services through one of the nation’s largest and most technologically-advanced mobile networks. Moreover, this transaction allows to release the capital to deleverage VEON’s balance sheet and invest in critical aspects of active network and digital opportunities while achieving more financial flexibility».

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