Mobile phone operator Veon sells Russian business for $2.2 billion


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MOSCOW — Amsterdam-listed mobile operator Veon announced on Thursday that it will sell its Russian business, Vimpelcom, to senior members of Vimpelcom’s management team, led by CEO Aleksander Torbakhov, for 130 billion rubles ($2.2 billion).

Veon operates the Beeline brand through Vimpelcom in Russia, a market that accounts for around half of the group’s revenue. Veon also operates Beeline in Kazakhstan and Kyivstar in Ukraine.

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Veon, which expects the deal to close by June 1, joins a growing list of Western companies that have sold assets in Russia since Moscow sent tens of thousands of troops to Ukraine on June 24. february.

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Veon said the management buyout of Vimpelcom involves an expected enterprise value of around 370 billion rubles. Although Veon is selling at a discount, the transaction represents a relatively rare example of the parties swapping money as companies race to leave Russia.

Japan’s Nissan suffered a $687 million loss when it sold its Russian operations to a public entity for one euro, mirroring an earlier decision by Renault to sell its majority stake in Russia’s Avtovaz for one rouble. Many companies have not disclosed the price of their divestments.

The deal includes a provision that allows Veon to benefit from the sale of Vimpelcom at a higher valuation for a period of 30 months after the deal closes.

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Shares of Veon rose 8.6% in close trading in Amsterdam to 0.57 euros at 1532 GMT. Shares have traded near record highs since falling after Russia began what it calls its “special military operation” in Ukraine.

“The management buyout of our Russian operations will benefit all parties involved,” Veon CEO Kaan Terzioglu said in a statement to Reuters.

“Customers and employees will see a seamless transition, investors and bondholders will see a deleveraging of our balance sheet, and Veon will be able to focus on our digital operator strategy in our portfolio of countries of operation.”

Veon’s operations in Kazakhstan will be transferred to Veon Holdings as part of the transaction and certain intercompany loans will be extinguished, Veon said.

Torbakhov said the deal marks an important milestone for Beeline.

“The management team represented by me, Svetlana Kirsanova, Maxim Zaikov, Valeriy Shorzhin and Renat Nasretdinov succeeded in forming the most balanced offer for Veon Group, which ensured its victory in the competitive process of selling the asset “Torbakhov said.

($1 = 60.3500 rubles) (Reporting by Alexander Marrow in Moscow and Supantha Mukherjee in Stockholm; Additional reporting by Jake Cordell and Toby Sterling; Editing by Guy Faulconbridge, David Goodman, Mark Potter and Sandra Maler)

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