Company needs funds for modernization, as well as the bank debts payment.
Ukrtelecom telecommunication company which is part of the CKM holding owned by Rinat Akhmetov wants to sell out its real estate for networks modernization and the bank debts payment. This was reported by RBC-Ukraine.
The company owns 22 buildings with total area of 100 thousand square meters. As the newspaper notes, their estimated cost is UAH 700 million. As said Michael Shuranov, the corporate communications director of Ukrtelecom in Kiev, network modernization was scheduled for August 2016. After modernization Internet connectivity speed for Ukrtelecom’s subscribers connected by ADSL technology is expected to increase up to 20 Mbit/s, while new users will be able to connect to the Internet by VDSL technology at speed up to 60 Mbit/s. As outdated ATS equipment will be replaced by a compact apparatus, at the moment Ukrtelecom is researching whether there can be market demand for free building.
“Unfortunately, demand in the real estate market is now extremely low because of the economic situation. So, we can not estimate the fair market value of real estate without studying the demand and generally be we can not be confident that they will be in demand” – said Mikhail Shuranov.
It should be noted that the largest premises that Ukrtelecom wants to sell is located in Kyiv at the address: 23, Moskovskaya str. The starting price of the building with the area over 6000 square meters (with the land plot of 0.29 ha) is UAH 109.3 million.
However, the revenue from the sale of Ukrtelecom’s real estate will be needed not only for the networks modernization, but also to pay off their debts. According to information stated in the financial report for the first quarter of this year, Ukrtelecom must pay off the debt in the amount of UAH 2 billion to Oschadbank and Ukreximbank state banks.
Last year, the operator purchased in these banks bonds of its parent company ESU which is part of the SCM. In early 2011, ESU has sold to the state banks bonds of worth UAH 4.2 billion. These funds were needed to complete the privatization of Ukrtelecom. However, part of the company’s debt is not paid yet and its settlement was postponed until the end of 2017.
According to the financial report, Ukrtelecom is planning to pay the debt using the amount received from the sale of the 3G-operator Trimob. Earlier Mediasat has written that Vodafone may become a potential purchaser. But the deal had not been proceeded since the spring, as the Antimonopoly Committee of Ukraine had not issued a permit for concentration. According to the publication, at the moment the AMCU is still studying and analyzing information received from the market players and NCRCI.
The delay remains in only one thing: if Oschadbank and Ukreximbank will not receive the full amount of telecommunication company’s debt, they may claim their rights for 92.79 % of Ukrtelecom’s shares.
