Veon has revealed its deal to sell its Russian business, Vimpelcom, to senior members of the Vimpelcom management team, led by CEO Aleksander Torbakhov, for 130 billion roubles ($2.1 billion).
Veon operates the Beeline brand through Vimpelcom in Russia, a market that accounts for about half of group revenue. Veon also operates Beeline in Kazakhstan and Kyivstar in Ukraine.
Vimpelcom reported revenue of $1,189 million (–6.1 percent) and EBITDA of $510 million (+7.3 percent) during the third quarter of 2022.
Beeline Russia’s total mobile subscriber base was 46 million at the end of the third quarter, decreasing 9.1 percent, as Beeline Russia focussed on improving the quality of customer base and engagement. 4G users grew 1.4 percent, bringing the 4G user base to 25.7 million.
Beeline Russia’s Capex in 3Q22 was RUB 12.9 billion, down 24.2 percent. Capex intensity of Beeline Russia’s decreased by 7.5 p.p. to 21.6 percent.
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, VimpelCom generated revenue of RUB 339 billion and EBITDA of RUB 115 billion for the twelve months ended 30 September 2022.
Veon, which expects the transaction to complete by June 1, joins the growing list of Western companies to sell assets in Russia since Moscow sent tens of thousands of troops into Ukraine in late February.
“The agreed sale of VEON’s Russian operations to the VimpelCom management team represents an optimal solution for VEON,” CEO Kaan Terzioglu said in a statement.
“The top management team represented by me, Svetlana Kirsanova, Maxim Zaikov, Valeriy Shorzhin and Renat Nasretdinov managed to form the most balanced offer for Veon Group, that ensured its victory in the competitive process on selling the asset,” Aleksander Torbakhov said.
