VEON enters into agreement to sell its Russian operations
November 24 2022 - 07:44AM
GlobeNewswire Inc.
Amsterdam, Netherlands, 24 November 2022
13:25 – VEON Ltd. (NASDAQ: VEON, Euronext Amsterdam:
VEON), a global digital operator that provides converged
connectivity and online services, today announces that following a
competitive process, it has entered into an agreement to sell
VEON’s Russian operations to certain senior members of the
management team of PJSC VimpelCom (“VimpelCom”), led by its current
CEO Aleksander Torbakhov.
The management buy-out of VimpelCom implies an
expected enterprise value of approximately RUB 370 billion,
representing an expected enterprise value / 2022E EBITDA multiple
of 3.2x. On a standalone basis, for the twelve months ended 30
September 2022, VimpelCom generated revenue of RUB 339 billion and
EBITDA of RUB 115 billion.
Under the agreement, VEON will receive total
consideration of RUB 130 billion (approximately USD 2.1 billion1).
It is expected that the total consideration will be paid primarily
by VimpelCom taking on and discharging certain VEON Holdings B.V.
debt, thus significantly deleveraging VEON’s balance sheet. The
transaction is subject to customary closing conditions, including
receipt of requisite regulatory approvals, licenses from relevant
government authorities and any required consent from VEON
creditors. The target completion date for the transaction is on or
before 1 June 2023, with options on both sides for extensions in
case any required regulatory license has not yet been received.
“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. VEON is committed to
ensuring the transaction is seamless for staff and customers in
Russia, with no disruption to the services currently provided,”
said Kaan Terzioğlu, CEO of VEON Group. “This transaction will be
equity accretive, result in significant deleveraging of VEON’s
balance sheet and will enhance VEON’s credit profile.”
As part of the transaction, ownership of VEON’s
Kazakhstan operations will be transferred to VEON Holdings B.V. and
certain inter-company loans will be extinguished. This will ensure
that VEON will continue to consolidate its Kazakhstan operations,
with VEON Holdings B.V. taking direct ownership of the Group’s 75%
stake in Kar-Tel, which operates under the Beeline brand.
The agreement also includes a customary
provision that enables VEON to benefit from a potential subsequent
event, including a sale of VimpelCom at a higher valuation, for a
period of 30 months following closing, and provides for typical
termination rights in favor of VEON in case of a change in control
of the buyer entity (JSC Kopernik-Invest 3). The agreement is
governed by Russian law and provides for international dispute
resolution.
About VEONVEON is a global
digital operator that currently provides converged connectivity and
online services to over 200 million customers in seven dynamic
markets. We are transforming people’s lives, empowering
individuals, creating opportunities for greater digital inclusion
and driving economic growth across countries that are home to more
than 8% of the world’s population. Headquartered in Amsterdam, VEON
is listed on NASDAQ and Euronext.For more information visit:
https://www.veon.com.
About JSC Kopernik-Invest 3JSC
Kopernik-Invest 3 is a special purpose acquisition vehicle formed
for this transaction to act as buyer under the acquisition
agreement, and is 100% indirectly owned by the members of VimpelCom
senior management which are participating in the transaction.
DisclaimerThis release contains
“forward-looking statements,” as the phrase is defined in Section
27A of the U.S. Securities Act of 1933, as amended, and Section 21E
of the U.S. Securities Exchange Act of 1934, as amended.
Forward-looking statements are not historical facts, and include
statements relating to, among other things, the closing of the
transactions described above. Forward-looking statements are
inherently subject to risks and uncertainties, many of which VEON
cannot predict with accuracy and some of which VEON might not even
anticipate. The forward-looking statements contained in this
release speak only as of the date of this release. VEON does not
undertake to publicly update, except as required by U.S. federal
securities laws, any forward-looking statement to reflect events or
circumstances after such dates or to reflect the occurrence of
unanticipated events. There can be no assurance that the
transactions referred to above will be successfully completed or
that requisite approvals for these transactions will be received.
Elements of this press release contain or may contain “inside
information” as defined under the Market Abuse Regulation (EU) No.
596/2014.
Contact informationVEON Group
Communications DirectorMarina Levinapr@veon.com
Group Director Investor RelationsNik
Kershawir@veon.com
TUVA PartnersManaging PartnerJulian
TannerJulian.tanner@tuvapartners.com
1 USD/RUB rate of 60.5043, source: Central Bank of Russia FX
rate as of 24 November 2022
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