Fitch Ratings has maintained Tele2 Russia Holdings's ratings, including its Long-Term Issuer Default Rating of 'BB+', on Rating Watch Evolving (RWE) on uncertainty over its longer-term capital structure and strategic shareholding situation.
The proposed terms of cooperation with Rostelecom suggest that this company will only acquire a minority 45% stake in a joint business with Tele2 Russia which will likely lead to a downgrade, however, other options remain available. The RWE is likely to be resolved once there is more clarity on these issues.
Tele2 Russia is a successful regional mobile-only operator in Russia with a lean and efficient business model. It is uniquely positioned as a mild price discounter. Tele2 Russia's ratings were placed on RWE following its acquisition by Russian Bank VTB from Tele2.
