Mostotrest Acquires 50% Stake in North-West Concession Company
OREANDA-NEWS. November 22, 2012. Mostotrest (hereinafter - Mostotrest or the Company, and together with its consolidated subsidiaries - the Group, MICEX-RTS stock ticker: MSTT) announces adoption on November 8, 2012 by its Board of Directors of the decision to approve acquisition by Mostotrest of a 50% stake in the North-West Concession Company (hereinafter - NWCC). The Transaction value amounts to RUB7,780,500,000, payable in cash.
NWCC is the concessionary for the 15-58 km segment of the Moscow - Saint Petersburg Toll Highway, under a contract from Avtodor State Company. Consortium led by Vinci, a leading global infrastructure construction and concession management group owns the remaining 50% stake in NWCC. Mostotrest is the general contractor for the construction of the concession segment.
According to the Transaction terms, Mostotrest will acquire 100% of Plexy Ltd. The core assets of Plexy Ltd include a 50% stake in NWCC and approximately RUB950 million in cash (as at the expected Transaction closing date). Sellers are the existing owners of Plexy Ltd: Perceive Holding Ltd and Octacore Holding Ltd, controlled by the beneficial owners of Marc O'Polo. The acquisition is expected to be financed out of the Company’s cash flow and through credit lines.
Acquisition of a stake in NWCC is in line with the strategy of Mostotrest aiming to build one of the first diversified infrastructure holdings in Russia and enter into other construction related segments with stable long-term cash flows. The concession project to build and operate the 15-58 km segment of the Moscow - Saint Petersburg Toll Highway is a highly attractive project allowing to diversify Mostotrest business towards longer term contracts with stable revenues effectively supplementing the construction business. Unique expertise and knowledge gained from the project will offer Mostotrest competitive advantages to benefit from Russia’s growing concessions market.
The Transaction is subject to approval as an interested party Transaction by an Extraordinary General Shareholders' Meeting. A Mostotrest Extraordinary General Shareholders' Meeting is scheduled for December 14, 2012. Also subject to approval by the Federal Antimonopoly Service, the Transaction is expected to be signed and closed before the end of 2012.
In connection with the approval of the Transaction by the Board of Directors of Mostotrest, Deutsche Bank and J.P. Morgan issued separate opinionsto the Board of Directors of the Company as to the fairness, from a financial point of view, of the consideration to be paid by the Company in the Transaction.
Mostotrest CEO Vladimir Vlasov comments on the Transaction: "In recent years, the Company management has been closely monitoring development trends in the transport infrastructure market and contemplating potential diversification into Russia's emerging concessions business. Acquisition of a stake in NWCC represents a unique investment opportunity for Mostotrest, allowing to create a platform for further growth in the concession business and develop a more diversified and attractive business model."
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