Veon completes Russia exit as Vimpelcom sale closes

By Alexander Marrow

(Reuters) -Amsterdam-listed mobile telecoms operator Veon said on Monday it had completed its exit from Russia as it closed the sale of its Russian business, Vimpelcom, to senior members of the Vimpelcom management team, led by CEO Aleksander Torbakhov.

Russia has steadily tightened exit requirements since Western companies started leaving in the wake of Moscow’s invasion of Ukraine in February 2022. Executives say navigating the rules is becoming harder.

“The transaction does not provide for any buy-back arrangements and signifies a complete exit from the Russian market for Veon,” the company said in a statement.

In November 2022, Veon announced plans to sell Vimpelcom for 130 billion roubles ($1.28 billion). Last month, it said that subsequent amendments made to the sale and purchase agreement had no material impact on the economic terms agreed last November.

The deal was worth around $2.1 billion when first announced. The rouble has lost about a quarter of its value since then.

Vimpelcom operates Veon’s Beeline brand in Russia. Veon also operates Beeline in Kazakhstan and Kyivstar in Ukraine.

Veon’s exit provides a rare example of a Western business selling its operations in Russia for a sizeable sum. Many companies have sold factories and brand rights for symbolic one-rouble amounts, while Moscow has unilaterally seized some assets and installed its own managers.

Veon said last November that the management buyout of Vimpelcom implied an expected enterprise value of approximately 370 billion roubles. Russia only gives approval to foreign asset sales after a 50% discount is imposed.

“This first and foremost opens up new opportunities for the company,” said Torbakhov in a separate statement. “We have freed ourselves from restrictions and now will become even more mobile and open for partnership within our country.”

Vimpelcom has become a fully Russian company, it said, and acquired over 96% of all Veon’s bonds in Russia.

Investment bank Aspring Capital, which has advised on dozens of Western firms’ exit deals, acted as Veon’s financial adviser. Two Russian law firms acted as legal advisers for Veon and the buyers respectively.

($1 = 101.5200 roubles)

(Reporting by Alexander Marrow; Editing by Emelia Sithole-Matarise)