$65 million loan to Ukraine’s Datagroup to spur growth

April 19, 2021

Local currency financing to strengthen telecommunications industry 

  • EBRD loan of $65 million in hryvna-equivalent to support Datagroup-Volia merger
  • Consumers to reap benefits of consolidation
  • Largest EBRD loan for Ukraine’s telecommunications, media and technology sector

Datagroup, a leading national fibre infrastructure and digital services provider in Ukraine, is purchasing Volia, the country’s leading pay-TV and cable broadband service provider in the retail segment, with the financial backing of the European Bank for Reconstruction and Development (EBRD).

The EBRD is providing a local currency loan equivalent to $65 million to Datagroup, which is majority owned by a fund managed by Horizon Capital. This will primarily finance the acquisition of Volia to help build a stronger, more competitive telecommunications operator with improved quality of service and an expanded product range.

Matteo Patrone, EBRD Managing Director, Eastern Europe and the Caucasus, said: “At the EBRD we believe in the power of technology to bring about change for the better. Ukraine’s increasing digitalisation requires large-scale investments to expand coverage, accelerate speed and improve quality. Soon Ukrainian consumers will reap the benefits of Datagroup and Volia joining forces. The merged entity will invest in better infrastructure, innovation and excellent customer service, making it easier for all to connect with each other.”

Lenna Koszarny, Horizon Capital’s Founding Partner and Chief Executive Officer, added “We are delighted that the EBRD is backing our vision of bringing Datagroup and Volia together. This merger will create a platform of sufficient scale to attract substantial capital investments to modernise Ukraine’s last-mile and national fibre infrastructure. The EBRD is a valued partner of Horizon Capital and its portfolio companies, providing expansion loans to increase production capacity, acquisition financing to grow businesses and fund commitments to attract private capital to the region. The success of Datagroup and Volia will serve to promote Ukraine’s investment attractiveness and ultimately bring more foreign direct investment to the country.”

Mikhail Shelemba, Datagroup Chief Executive Officer and shareholder, stated: “We are delighted to announce our cooperation with the EBRD resulting in the provision of $65million in financing. These funds will be invested in the business to support growth and development – the acquisition of Volia as well as full-scale network modernisation. This financing supports our development plans, ensuring our network is the most modern in the Ukrainian telecommunications market, bringing quality of services to a whole new level and ensuring we surpass customer expectations as their reliable partner. We believe this is just the beginning of a long-term collaboration with the EBRD and look forward to many opportunities and large-scale projects ahead.”

Under the cooperation with the EBRD, Datagroup is also committing to expand its internship programme and provide greater training and employment opportunities for young women and men.

The EBRD is the largest institutional investor in Ukraine. In the past two years alone, the Bank has committed €2 billion to the economy. The investments are combined with support for policies that promote the fight against corruption, good governance of state-owned enterprises, structural reforms and a more transparent business environment.

Horizon Capital is a leading private equity firm in emerging Europe, backed by over 40 institutional investors with a capital base of over $350 billion, managing four funds with assets under management of over $850 million and a tenure of 25 years in the region. The firm is a growth equity investor, backing visionary entrepreneurs leading transformational businesses in Ukraine and the near region. Horizon Capital is known for its strong team, high governance standards, value creation and successful track record.

Datagroup is an all-Ukrainian communication solutions provider. For businesses it provides a wide range of services, including the construction of corporate networks, internet services and television, access to banking services, cybersecurity and protection against DDoS attacks, telephony and outsourcing contact centre, cloud and data centre services. For individuals, Datagroup provides internet, television and telephony services. Datagroup is one of the fastest-growing telecommunications companies in Ukraine.

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