Mobile operator Veon sells Russian business for $2.2 billion

  • This content was produced in Russia, where laws restrict reporting on Russian military operations in Ukraine

MOSCOW, Nov 24 (Reuters) – Amsterdam-listed mobile operator Veon (VON.AS) said on Thursday it would sell its Russian business, Vimpelcom, for 130 billion rubles to a deal led by Chief Executive Alexander Torah. Senior member of the Vimpelcom management team led by Aleksander Torbakhov. ($2.2 billion)

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

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

The management buyout of Vimpelcom implies an expected enterprise value of around 370 billion rubles, Veon said. Although Veon is being sold at a discount, the deal represents a relatively rare example of money changing hands between two parties as the company races to exit Russia.

Japan’s Nissan (7201.T) handed over its Russian operations to a state-owned entity for 1 euro, causing a $687 million loss, similar to an earlier move by Renault (RENA.PA ), which paid 1 euro Price sold its majority stake in Russia’s Avtovaz for rubles. Many companies do not disclose prices.

Shares in Veon rose 4.5 percent to 0.55 euros in thin trade in Amsterdam. Shares have traded near record lows since they tumbled after Russia began what it called a “special military operation” in Ukraine.

“The management buyout of our Russian business will benefit everyone involved,” Veon Chief Executive 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 across our portfolio of countries of operation. “

Torbakhov said the deal marks an important milestone for Beeline.

“The top management team, represented by myself, Svetlana Kirsanova, Maxim Zaikov, Valeriy Shorzhin and Renat Nasretdinov, managed to provide Veon Group with the most balanced offer, ensuring it a successful competitive sale of assets,” 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 and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

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