Megafon hopes to clarify deal details in days

David Hellier
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ADVISERS to Megafon, the Russian mobile phone operator intending to float in London and Moscow, said it would clarify the intentions of its controlling shareholder Alisher Usmanov in the next few days after concerns there might be corporate governance issues.

The group, which published its intention to float statement earlier this week, was rocked by suggestions that corporate governance concerns lay behind a decision by Goldman Sachs to step aside from the equity offering which is expected to raise around £2bn.

Goldman’s departure leaves the issue, which will be one of the largest Russian equity offerings in London since 2008, being led by Morgan Stanley and Sberbank, together with Citi, Credit Suisse and VTB as joint bookrunners.

“I’m very happy that we have taken this step [to IPO],” said Andreas Ekstrom, head of investor relations for Teliasonera of Sweden, which has a 35 per cent stake in the group.

“We have five banks with us in the deal who will help to take us forward,” he said.

Megafon says that the corporate structure of the group being floated is of a high standard. It plans to have four directors out of seven that are unrelated to Usmanov, its 50 per cent shareholder.

But Goldman Sachs’ concerns are believed to relate to an umbrella company still being put together by Usmanov with associates that would combine his steel assets and his stake in Arsenal football club.

Sources close to Megafon say the structure of the umbrella company will be outlined in the prospectus for the flotation, which will be published within the next few days.