Dutch-registered Veon has decided to sell its operations in Russia, which include Vimpelcom.
In a statement, Veon said that its management is “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”.
Broadband TV News notes this is far from a simple case of a Western company withdrawing from Russia following the events of the last eight months. According to Kommersant, the move likely to result in the transfer of Veon’s Russian business to top management. The transfer to Russian jurisdiction, will allow Veon to avoid possible sanctions, and Vimpelcom to satisfy the requirements of the regulator.
Quoting Vimpelcom, it adds that a lot of regulatory restrictions were imposed on the company due to the fact that the company’s shareholder is a foreign holding from an unfriendly jurisdiction. “This has led to the fact that the company is in a less favourable position compared to other players in the telecom market”.
Kommersant says that Vimpelcom is owned by the Dutch holding Veon, 25% of which is owned by Letterone Holdings. Letterone Holdings founders Mikhail Fridman, German Khan and Alexei Kuzmichev, as well as board member Petr Aven, have been under Western sanctions since the spring of 2022. In May, Kuzmichev and Khan withdrew from the number of co-owners of LetterOne.
Veon’s annual report stated that the holding’s reputation had suffered “as a result of the association of sanctioned persons with the largest shareholder.” In August, the company also admitted that it would have to stop the development of networks in Russia due to sanctions. Veon also said it was exploring the possibility of optimising assets in “inappropriate” markets. In June this year, Veon sold an asset in Georgia to a local businessman, and by 2023 plans to sell tower assets in Bangladesh, Pakistan and Ukraine.
According to Veon, in the second quarter of 2022, Russia accounted for more than half of the holding’s revenue, that is, a little over $1 billion.