Veon to sell Russia’s Beeline

Dutch-based telecom holding company Veon has said that it is conducting a competitive sales process in relation to its Russian operations. Veon operates the VimpelCom Beeline-branded multiplay operator in Russia.

“Veon’s management is currently exploring options in an effort to ensure that an optimal outcome is achieved for all relevant stakeholders, including Veon, its Russian operations, its shareholders, its creditors, its customers and its employees working both in and outside of Russia,” the company said.

Veon’s largest shareholder is LetterOne, the investment vehicle of sanctioned Russian billionaire Mikhail Fridman, which holds a 48% stake. Fridman stepped down as a director of LetterOne following the imposition of sanctions after Russia’s invasion of Ukraine.

The invasion saw Veon’s share price nosedive. The Beeline business accounts for just over half of Veon’s revenues, amounting to US$5.2 billion for the first nine months of the year, and just under half of its EBITDA.

Veon has been placed in a difficult situation by the war, as it also owns Ukrainian operator Kyivstar, and Ukraine is its third largest market. The company has also seen lenders threaten to review their relationship with it following Russia’s aggression.

In addition to having infrastructure destroyed in Russian attacks, Kyivstar, like other Ukrainian operators, has seen its infrastructure in occupied parts of the country stolen and services taken over by Russian-backed operators.

Russian analysts have speculated that the Russian operation could be sold to its management, given that a sale to another Russian operator could attract the attention of the Russian Federal Antimonopoly Service (FAS), while a sale to an international buyer is considered unlikely for political reasons.