The company now has complete discretion to carry out a significant divestment in a troubled market.
What transpired on Wednesday was that Russia-focused and Central Asian-focused telecom Veon (VEON 12.74%) had some excellent regulatory news to share, which led to a 10% increase in the price of its shares on the U.S. market. Investors found the fact that the company is now free to initiate a significant divestment extremely encouraging.
Therefore, in a press release issued that morning, Veon stated that on Tuesday, it had received approval from Russian regulators to sell its operations there.
More specifically,
the proposal to sell Veon to senior members of the management of PJSC VimpelCom, a related company, has been approved by the Sub-Commission of the Government Commission for Control of Foreign Investments. Interestingly, Veon was previously known as VimpelCom.
Even though Veon is based in The Netherlands, the telecom company has roots in Russia.
Veon had been given permission to carry out the transaction by Russia’s Federal Antimonopoly Service prior to the Commission’s approval.
Veon stated in its press release that the deal will occur prior to June 1 now that the path forward is clear and the remaining closing conditions should be met.
Veon declared its acceptance of the $1.82 billion (130 billion rubles) sale in November 2022. The sale “is expected to be accretive to equity, reduce Veon’s debt, and improve its credit profile,” according to the company’s CEO, Kaan Terziolu.
What comes next? Given that sanctions imposed as a result of the war in Ukraine are putting a lot of pressure on the Russian economy, the current situation is hardly favorable for business. That reaction from investors must have included a great deal of relief.
