News brief: Veon gets green light to exit Russia
- Veon is on its way out of Russia
- It has received another regulatory approval to sell Beeline
- The deal will net Veon about $2bn that can be used to pay down some debt
After a few stumbles, Veon is now a step closer to exiting Russia by the middle of this year after being given the go-ahead from the country’s regulators to sell its Beeline business to the local management team for around $2bn.
The operator announced that its sale proposal has received approval from the Sub-Commission of the Government Commission for Control over Foreign Investments in Russia. This follows clearance from the domestic Federal Antimonopoly Service.
Having received these regulatory blessings, Veon now expects “the remaining closing conditions will be satisfied” and Beeline will be sold to “certain senior members” of the management of PJSC VimpelCom (the official company name for Beeline) on or before 1 June this year.
Veon unveiled its intentions to exit the Russian market in November 2022, following tensions that arose from the conflict between Russia and Ukraine, where Veon also does business – see Veon puts its Russian operator Beeline up for sale.
It reached an initial deal to sell the operation shortly after, but in late January Reuters reported that the proposal was facing opposition from Russia’s finance ministry, economy ministry and central bank.
Veon Group CEO Kaan Terzioğlu reaffirmed the company’s stance that the transaction is “the optimal solution for Veon, its Russian operations and all stakeholders”. He described the regulatory approval as a “significant milestone in the transaction, which is expected to be accretive to equity, [to help] reduce Veon’s debt and improve its credit profile.”
The Russian market generates more than half of Veon Group’s revenues and earnings before interest, tax, depreciation and amortisation (EBITDA). Through the sale, Veon is expected to receive 130bn Russian rubles (which equals to around $1.8bn at current exchange rates as the value of the Russian currency keeps falling). If finalised, the transaction will come at a key moment for Veon as it recently asked to delay repayments to some of its creditors – see What’s up with… Orange, BT, TelcoDR and STL.
- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV
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