News brief: Veon sells its Russian business for $2.1bn
- Veon decided in early November to sell Beeline and exit Russia
- It has struck a deal to sell the business for US$2.1bn
Less than a month after it announced plans to offload its Russian operation, Veon has struck a deal to sell Beeline (also known in Russia as VimpelCom) to members of the local management team for about US$2.1bn.
“After considering numerous options, I am confident that the agreed sale of Veon’s Russian operations to the VimpelCom management team represents an optimal solution for Veon, its Russian operations and the stakeholders of both companies, including customers, shareholders and creditors, as well as employees both in and outside of Russia,” stated Kaan Terzioğlu, CEO at Veon, the international operator that runs networks in Asia and Eastern Europe (including Ukraine).
“Veon is committed to ensuring the transaction is seamless for staff and customers in Russia, with no disruption to the services currently provided,” added Terzioğlu.
Veon will receive 130 billion Russian rubles (RUB) ($2.1bn) from the sale, which implies a total enterprise value for the Russian business of about RUB 370bn ($6.1bn).
Beeline had almost 47 million mobile customers at the end of August this year, of which 26 million were 4G users. For the 12 months that ended on 30 September 2022, the operator generated revenues of RUB 339bn ($5.6bn) and EBITDA of RUB 115bn ($1.9bn).
The move is significant from a regional and political perspective but also from a business perspective for Veon because Beeline currently generates more than half of its group revenues and almost half of its earnings before interest, tax, depreciation and amortisation (EBITDA). Veon signalled last month that its strategic attention had switched to its other markets when, in a letter from the CEO Kaan Terzioğlu to shareholders, it noted that it was “well positioned to continue its strategy of developing our digital operator business in our high-growth markets (Pakistan, Bangladesh, Kazakhstan, Uzbekistan and Kyrgyzstan), and we plan to advance these investments in the coming years.” For more on that decision, see this article.
- Ray Le Maistre, Editorial Director, TelecomTV
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