Dutch VEON started selling Beeline

The Dutch holding VEON has started the sale of the Russian business, VimpelCom, the largest provider of telecommunications services (Beeline brand).

A post on the VEON website says that the holding’s management is exploring options that would suit all interested parties, including shareholders, creditors, customers and employees who work in Russia and abroad.

VimpelCom has confirmed the start of the operator’s ownership restructuring. Sources of the Kommersant newspaper claim that the Russian business will be transferred to the management of the company’s top management.

Due to the sanctions imposed on Russia after the attack on Ukraine, VimpelCom came under regulatory restrictions, as the VEON shareholder is in an “unfriendly” jurisdiction. This led to the fact that the company was at a disadvantage compared to other market players, Kommersant writes.

By withdrawing from VimpelCom shareholders, VEON will reduce its reputational risks. The company spoke about them in the annual report for 2021.

In June, VEON said its Russian business was worth nearly $450 million in value in the first quarter of 2022. In the second quarter, Russia accounted for more than half of the holding’s revenue – more than one billion dollars.

VEON also announced that it will have to stop the development of Russian networks due to sanctions. The Dutch holding is also considering the sale of tower assets in Bangladesh, Pakistan and Ukraine until 2023.

In June, it became known that VEON was selling its Georgian asset VEON-Georgia for $45 million. The buyer was a local partner of the holding, businessman Khvicha Makatsaria. The VEON holding then said that the deal “corresponds to the company’s desire to optimize its structure.”

VEON owns 100% of VimpelCom. The Russian company was founded in 1992 by businessman Dmitry Zimin. VimpelCom joined VEON in 2009.
The largest shareholder of VEON is LetterOne, which is part of Mikhail Fridman’s Alfa Group and partners – it owns 47.9% of the shares. The company’s free float on Nasdaq is 43.8%, another 8.3% of the group is managed by the Dutch trust – Stichting.