Cellular operator Veon sells Russian business for $2.2 billion

  • This content was produced in Russia, where the law restricts coverage of Russian military operations in Ukraine

MOSCOW, Nov 24 (Reuters) – Amsterdam-listed mobile operator Veon (VON.AS) announced on Thursday that it was selling its Russian business Vimpelcom for 130 billion rubles to senior members of the Vimpelcom management team led by CEO Aleksander Torbakhov will ($2.2 billion)

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

Veon, which expects the deal to close by June 1, joins the growing list of Western companies selling assets in Russia since Moscow sent tens of thousands of troops to Ukraine in late February.

Veon said the Vimpelcom management buyout implies an expected enterprise value of about 370 billion rubles. Although Veon is being sold at a discount, the transaction represents a relatively rare example of money moving between parties when companies attempt to exit Russia.

Japan’s Nissan (7201.T) suffered a loss of US$687 million when it sold its business in Russia to a state-owned company for one euro, mirroring an earlier move by Renault (RENA.PA), which bought its majority stake rubles sold on the Russian Avtovaz for one euro. Many companies have not disclosed the price.

Veon shares rose 4.5% to €0.55 in thin trading in Amsterdam. Stocks have been trading near record lows since plummeting after Russia began its so-called “military special operation” in Ukraine.

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

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

Torbakhov said the deal is an important milestone for Beeline.

“The top management team I represent, Svetlana Kirsanova, Maxim Zaikov, Valeriy Shorzhin and Renat Nasretdinov, managed to create the most balanced offer for Veon Group, which ensured its victory in the competitive process of selling assets,” said Torbakhov.

($1 = 60.3500 rubles)

Reporting by Alexander Marrow in Moscow and Supantha Mukherjee in Stockholm; additional reporting from Jake Cordell and Toby Sterling; Edited by Guy Faulconbridge, David Goodman and Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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