Following the sale of its native operations on October 9, 2023, Amsterdam-based multinational telecom group VEON has accomplished its exit from Russia.
The unit was bought to a bunch of senior members of the Russian enterprise PJSC VimpelCom (Beeline Russia) administration workforce, led by PJSC VimpelCom CEO Alexander Torbakhov.
VEON Group CEO Kaan Terzioglu commented: “The closing of the sale and the completion of our exit from Russia permit us to completely focus our power on the best way ahead, assembly the rising demand in our markets—Pakistan, Ukraine, Bangladesh, Kazakhstan, Uzbekistan, and Kyrgyzstan—with our digital operator technique. I’m happy to notice that we at the moment are in a a lot stronger place to ship our strategic priorities.”
As beforehand introduced, the transaction doesn’t present for any buy-back preparations and signifies an entire exit from the Russian marketplace for VEON.
The transaction signifies an entire exit from the Russian marketplace for VEON.
Based on the operator, the transfer will allow it to ship greater development and function with a decrease leverage and ample liquidity because it concentrates on six high-potential rising markets.
Sale Particulars
VEON first introduced its intention to exit Russia on November 24, 2022, when it entered into an settlement to promote PJSC VimpelCom—which represented greater than half of group revenues—to senior members of the Russian administration workforce by way of a particular objective acquisition automobile, Kopernik-Make investments 3.
Underneath the settlement, initially concentrating on a sale completion date of June 1, 2023, VEON would obtain a complete consideration of RUB130 billion ($2.15 billion). This sum was anticipated to be paid primarily by PJSC VimpelCom taking over and discharging sure VEON Holdings (Netherlands) debt, thus considerably deleveraging VEON’s stability sheet.
VEON may additionally profit from a possible subsequent sale of Beeline Russia at the next valuation, for a interval of 30 months following closing.
The transaction was topic to customary closing circumstances, together with receipt of requisite regulatory approvals, licenses from related authorities authorities, and consent from VEON collectors.
Monetary Highlights
VEON Annual Outcomes, 2017-2022
| $ million | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
| Complete Income | 9,474 | 9,086 | 8,863 | 7,970 | 8,111 | 6,848 |
| Working Bills | 7,968 | 8,515 | 6,914 | 7,334 | 6,529 | 6,014 |
| Working Revenue | 1,506 | 571 | 1,949 | 636 | 1,582 | 834 |
| Internet Revenue | -482 | 588 | 706 | -348 | 674 | -549 |
| EBITDA | 3,587 | 3,273 | 3,703 | 3,453 | 3,470 | 3,030 |
| EBITDA Margin | 37.9% | 36.0% | 41.8% | 43.3% | 42.8% | 44.2% |
| CAPEX | 1,791 | 1,934 | 1,773 | 2,383 | 2,744 | 1,416 |
| CAPEX as a % of Income | 18.9% | 21.3% | 20.0% | 29.9% | 33.8% | 20.7% |
On February 8, 2023, VEON introduced the Russian Authorities Fee for Management over Overseas Investments’ conditional approval for the sale, additionally confirming that the Federal Antimonopoly Service had approved the transaction.
Earlier, the top of Russia’s Ministry of Digital Growth, Communications & Mass Media, Maksut Shadayev, said that authorities permission was conditional on PJSC VimpelCom shopping for again at the very least 90% of VEON bonds beforehand acquired by Russian buyers.
On April 15, 2023, VEON obtained a license from the U.S. Workplace of Overseas Belongings Management to promote PJSC VimpelCom, whereas VEON additionally obtained permissions from authorities within the UK and Bermuda to finish the transaction. EU approval was not required.
On Might 30, 2023, VEON said that it had entered the ultimate stage of sale completion by submitting all requisite documentation for the cancellation of its Eurobonds held by PJSC VimpelCom—a non-cash transaction vital for the Russian exit.
On September 13, 2023, VEON disclosed closing amendments to the sale settlement. It was famous that all the consideration for the sale can be happy by transferring the VEON Holdings Bonds acquired by PJSC VimpelCom to an entirely owned subsidiary of VEON Holdings, which is able to maintain such notes till their cancellation or maturity, whereas U.S. and different regulatory approvals had been obtained for the switch of roughly 95% of the bonds.
VEON lastly closed the sale on October 9, 2023.
Six Remaining Markets
Russia was VEON’s largest single operation. However, the group, which is listed on the U.S. NASDAQ and Euronext Amsterdam inventory exchanges, nonetheless has almost 156 million cell and stuck broadband subscriptions throughout its six subsidiaries.
156 Million Cellular Subscriptions
VEON Persevering with Operations, June 2023
| Nation | Firm | Cellular | Fastened Broadband | ||
| Subscriptions | Market Share | Subscriptions | Market Share | ||
| Bangladesh | Banglalink | 39,129,771 | 21% | ||
| Pakistan | Jazz | 71,334,141 | 37% | ||
| Ukraine | Kyivstar | 24,133,549 | 50% | 1,107,541 | 16% |
| Uzbekistan | Unitel (Beeline) | 8,615,040 | 26% | 6,000 | 0% |
| Kazakhstan | KaR-Tel (Beeline) | 10,773,334 | 43% | 658,028 | 23% |
| Kyrgyzstan | Sky Cellular (Beeline) | 1,912,313 | 26% | ||
Supply: TeleGeography’s GlobalComms Database
The biggest of its remaining markets is Pakistan, the place its subsidiary Jazz claimed greater than 71.3 million cell subscriptions as of mid-2023. Subsequent largest are Banglalink in Bangladesh and Ukraine’s Kyivstar, with 39.1 million and 24.1 million cell subscriptions, respectively, on the similar date.
The group is 47.85%-owned by Luxembourg-based funding group LetterOne by way of its wholly owned unit Letterone Core Investments. A complete of 43.84% is in free float and the remaining 8.31% is held by Netherlands-based Stichting Administratiekantoor Cellular Telecommunications Investor.
For FY 2022, VEON’s complete revenues amounted to $3.755 billion, down 2.4% in reported forex phrases however up 14.0% in native forex, with annual service revenues of $3.60 billion (down 2.4% reported/up 13.9% native forex). FY22 EBITDA reached $1.743 billion (down 5.3% reported/up 12.6% native forex).
Full-year CAPEX of $832 million was 2.9% greater than in 2021, with CAPEX depth up 1.1 proportion factors as the corporate continued to spend money on 4G community growth.
Following Russia’s invasion of Ukraine in February 2022 and the following imposition of worldwide sanctions on sure Russian corporations and people, VEON moved to distance itself from two oblique shareholders, Mikhail Fridman and Petr Aven, who had been the topic of sanctions. It pressured that VEON itself was not the topic of any sanctions.
