Mail.ru Group (LSE and MICEX-RTS: “MAIL”) (“Mail.ru Group” or the “Company”), USM, Ant Group, Russian Direct Investment Fund (RDIF) and MegaFon today announced that they have signed binding agreements to create a payments joint venture (PJV) and a financial services joint venture (FSJV). The announcement follows the signing of non-binding term sheets in 2019, when the parties announced a partnership to promote financial inclusion in Russia.
The PJV and FSJV will work together to offer digital payment solutions and financial services designed to help people save money while spending it across the realm of the burgeoning e-commerce sector in Russia.
Mail.ru Group’s contribution into the PJV will amount to RUB 4.5 billion in assets consisting of a 100% stake in non-bank settlement credit institution Money.Mail.Ru (LLC) and VK Pay payment system. The two assets will continue being used as financial and payment instruments within the company’s ecosystem. Mail.ru Group will be the largest shareholder in the PJV with a 40% stake.
Mail.ru Group’s contribution into the FSJV will be RUB 870 million in cash in exchange for a 5.95% stake in the FSJV.
USM’s contribution into the FSJV will include a 100% stake in ASK Renessans, a 100% stake in Round Bank, a 100% stake in InPlat, other assets and cash.
Other shareholders including Ant Group, RDIF and MegaFon will contribute cash, assets or a combination of cash and assets into the FSJV and PJV.
A committee of the Board was formed to oversee the progress of the deals. The committee received third party assessments from Deloitte and fairness opinion from UBS AG London Branch. UBS acted as the financial adviser and provided a fairness opinion to Mail.ru Group in connection with the transactions.
The deals are expected to close in 2021 after satisfying a number of conditions including third party approvals. Upon completion, Russian shareholders will own the majority stakes in both the PJV and FSJV.