MegaFon recruits former UK minister ahead of IPO

Russia’s MegaFon has appointed the UK’s former treasury minister Lord Paul Myners as a non-executive independent director as it tries to mollify concerns about its corporate governance ahead of an IPO in Moscow and London later this month.

Controlled through AF Telecom by Alisher Usmanov, a Russian oligarch born in Uzbekistan, MegaFon is hoping to raise about $2 billion from a sale of shares that will reduce the holdings of Sweden’s TeliaSonera (Stockholm, Sweden) and MegaFon’s managers.

Russia’s MegaFon has appointed the UK’s former treasury minister Lord Paul Myners as a non-executive independent director as it tries to mollify concerns about its corporate governance ahead of an IPO in Moscow and London later this month.

Controlled through AF Telecom by Alisher Usmanov, a Russian oligarch born in Uzbekistan, MegaFon is hoping to raise about $2 billion from a sale of shares that will reduce the holdings of Sweden’s TeliaSonera (Stockholm, Sweden) and MegaFon’s managers.

The listing was postponed for three weeks after the UK Listing Authority (UKLA) took longer than expected to approve it. According to press reports, the UKLA was concerned about the sudden withdrawal of investment bank Goldman Sachs as an underwriter to the deal.

Bankers had reportedly voiced concerns over Usmanov’s plan to make MegaFon (Moscow, Russia) part of another shareholding.

“With the appointment of Lord Myners, MegaFon will have a balanced board structure with two independent non-executive directors, two directors nominated by TeliaSonera and three directors nominated by AF Telecom, which puts in place a strong corporate governance structure,” said Ivan Tavrin, MegaFon’s chief executive, in a statement.

Besides working as a treasury minister under the UK’s previous Labour government, Myners was previously a chairman of Marks & Spencer (London, UK) and also held directorial positions with mobile-phone operators O2 (London, UK) and Orange (London, UK).

MegaFon has recently been on a two-week roadshow aimed at attracting institutional investors in the US, Europe and Russia.

Published last week, the operator’s third-quarter results showed a 19.6% year-on-year increase in net profit, to 14.9 billion roubles ($473 million), on a 12.3% gain in revenues, to 71.2 billion roubles.