AMSTERDAM, Nov 2 (Reuters) – Dutch telecoms operator Veon Ltd (VON.AS) said on Wednesday it was looking to sell its Russian business, which accounts for more than half of its revenue and earnings.
Many companies have sought to reduce their exposure to Russia and have stopped or terminated operations there since the conflict erupted in Ukraine in February.
Veon, which also has operations in Ukraine, Pakistan and Kazakhstan, said it was conducting a “competitive sales process” for the business, which operates one of Russia’s largest mobile networks under the Beeline brand.
“There can be no assurance that the sale process described above will result in an acceptable offer, or that, even if an acceptable offer is obtained and results in an acquisition agreement, there can be no assurance that the necessary approvals will be obtained,” the company said in a statement.
Shares in Veon rose 11 percent to 0.50 euros in thin trade in Amsterdam. Shares in Veon have traded near record lows since Russia sent its armed forces to Ukraine in February, which Moscow called a “special operation.”
Credit rating agencies Standard & Poor’s and Fitch have downgraded Veon, which had $8.1 billion in net debt and $3.2 billion in cash liquidity as of Oct. 12. 7. Based on the most recent company statement.
The sale outcome is important to shareholders and creditors because Veon’s non-Russian business is profitable on an operational basis but small compared to the company’s debt.
Veon’s location is complicated by its presence in Ukraine, which has struggled to keep the Kyivstar mobile network running throughout the conflict.
Chief Executive Kaan Terzioglu told Reuters in March that he hoped the company could continue to operate in both markets as an essential service.
The company said on Wednesday that it wanted to achieve the best possible outcome for companies, shareholders, creditors, customers and employees “in and outside Russia.”
“No government has asked VEON to sell its operations in Russia,” a spokesman told Reuters on Wednesday. More than half of Veon’s 44,500 employees are in Russia, according to the company’s 2021 annual report.
For the first eight months of 2022, Beeline’s earnings before interest, taxes, depreciation and amortization (EBITDA) were 20 billion rubles ($325 million). It competes with bigger rivals MTS as well as Megafon and Tele2.
Veon Group’s total EBITDA for the same period was $604 million.
Reporting by Juliette Portala and Toby Sterling; Editing by Lincoln Feast, Jason Neely and Jane Merriman
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