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NEQSOL Holding announces early buyback of Vodafone Ukraine eurobonds for $49 mln
KYIV. Sept 10 (Interfax-Ukraine) – The international group NEQSOL Holding (acquired the mobile operator Vodafone Ukraine in December 2019) decided to start buying out the bonds of the mobile operator 4.5 years ahead of time, NEQSOL Holding said on Friday.
The company Vodafone Ukraine first issued eurobonds in the amount of $500 million in February 2020 with maturity until 2025.
"Thanks to the dynamic development of the company and its good financial results, the holding decided to start redemption of bonds 4.5 years ahead of time. To date, the first 10% have already been redeemed," NEQSOL Holding said in a statement.
The investor emphasizes that Vodafone Ukraine is growing at market rates, and even outstrips them in a number of indicators. Therefore, taking into account the financial stability of the implementation of the financial plan and the investment plan of the company, it was decided to focus on debt management and reduce it, thus reducing the cost of debt service.
"In addition, good financial results allowed, together with bondholders, to revise the covenants [loan commitments], which is an indicator of high trust and confidence in the company’s sustainable development. Thanks to the revision of the covenants, Vodafone Ukraine will become more flexible in terms of further investments, distribution of dividends and management of its resources," Imran Ahmadzada, CFO of NEQSOL Holding, Board Member of Vodafone Ukraine, is quoted in the report.
It is noted that a significant part of the financing of the acquisition of Vodafone Ukraine was provided in 2019 by high-rated financial institutions headed by J. P. Morgan Securities PLC and Raiffeisen Bank International AG. However, in addition, NEQSOL Holding initiated the issuance of bonds by Vodafone Ukraine by the rules of European regulators using the leverage buyout instrument.
"This financial instrument is widespread in the international practice of mergers and acquisitions, but in Ukraine over the past decade, the acquisition of Vodafone Ukraine became the first with the use of such a financing scheme," the holding notes.
Under the strategic management of NEQSOL Holding, Vodafone Ukraine continued its planned investments (primarily in expanding the coverage of the 4G network). At the same time, in addition to the early redemption of eurobonds, it paid dividends to shareholders.
According to the results of the second quarter of 2021, Vodafone Ukraine’s revenue increased by 19%, and net profit – by 20% compared to the same period in 2020.