Veon formerly Vimpelcom Ltd

Aktivs

Vimpelcom has its head office in Amsterdam.

The group includes telecom operators providing voice services, telematics and data services based on a wide range of wireless and fixed-line technologies, as well as broadband Internet access.

Services are provided under the Beeline trademark.

As of February 2017, the group includes:

• Russian mobile operator VimpelCom,
• Ukrainian Kyivstar,
• mobile operators in a number of CIS countries (operate under the Beeline brand),
• Italian operator Wind Telecomunicazioni, as well as
• mobile operators from Algeria, Pakistan, Bangladesh and Laos (the company later left that country's market).

Performance indicators

In 2015, Vimpelcom's net loss amounted to $691 million, which is 7% more than the previous year's cash losses. The company's revenue fell 29% to $9.6 billion. Earnings before interest, tax, revaluation and amortisation (EBITDA) included amounted to $2.86 billion, a decrease of 49% on an annualized basis. EBITDA margin was 29.7% versus 41.1% a year earlier. The company's market capitalization is $6.35 billion (February 23, 2016).

2022: Net loss - $317 million; revenue - 3.76 billion (-2.4%)

In 2022, Veon holding showed a net loss of $317 million. For comparison: a year earlier, a profit of about $674 million was demonstrated. Such data are contained in the financial report released on March 16, 2023.

Veon's revenue in 2022 amounted to $3.76 billion. This is 2.4% less than the result for the previous year, when this figure was $3.85 billion. Service revenue also decreased by 2.4% - from $3.69 billion to $3.6 billion. Revenue in the segment of data transmission and digital services in 2022 was at the level of $1.94 billion - this is 0.7% less compared to 2021.

Veon went into loss at the end of the year

The Veon report says that by the end of 2022, the total number of mobile subscribers reached 157 million, which is about 2.7% more than in the previous year. At the same time, in the 4G/LTE segment, the number of users rose by 19.4%, reaching 85 million. The penetration of fourth-generation cellular communications was 53.9%.

Veon notes that the current geopolitical situation and sanctions can negatively affect the business of both the company itself and its partners, suppliers and customers in the corporate sector. During 2022, the holding recorded significant asset impairment expenses.

It is said that due to the growing penetration of 4G and the provision of various digital services, the number of MultiPlay subscribers (using several services of the telecom operator) as of the end of 2022 reached 28.4 million. This is 40.3% more on an annualized basis. MultiPlay customers account for approximately 22% of the total number of subscribers, while they brought 38.6% of Veon's total revenue in the B2C segment. The ARPU indicator (average income per user) of MultiPlay subscribers is 3.6 times higher, and the outflow of customers is 0.4 times lower than that of subscribers who use exclusively voice communication.

Preliminary Fourth Quarter & Full Year 2022 Results

Stock on the stock exchange

OJSC VimpelCom was the first Russian company listed on the New York Stock Exchange (NYSE), the shares were listed under the symbol VIP. After the formation of VimpelCom Ltd holding company in April 2010, which consolidated the shares of VimpelCom and Kyivstar OJSC, the VIP symbol was re-registered to VimpelCom Ltd.

On March 31, 2017, due to the renaming of the company to Veon, the VIP symbol was changed to VEON.

In addition to listing on the American Nasdaq exchange, the company in the second quarter of 2017 holds an additional listing on the Euronext exchange located in Amsterdam.

2024: Departure from Euronext Exchange

In early August 2024, Veon announced delisting from the Euronext Amsterdam exchange, after which it intends to repurchase American depositary shares (ADS) in the amount of up to $100 million. The telecom holding believes that its ADSs are traded at a price that inadequately reflects their value in relation to the current activities of the company, and that the purchase of ADS for other corporate purposes opens up new opportunities for the company.

Board of Directors

Main article: Veon Board of Directors

History

2024

Moving headquarters from Amsterdam to Dubai

Veon is moving its headquarters from Amsterdam to Dubai, which the telecommunications holding reported in mid-October 2024.

With the move of its headquarters to Dubai International Financial Center, the group will become the largest listed company Nasdaq with headquarters in Dubai, where Nasdaq Dubai is also based, the company said. Veon explained that the decision to move the head office is due to the need to become closer to the key markets of the company.

Sale of Kazakhstan telecom company TNS +

On May 28, 2024, Veon announced the signing of an agreement on the sale of Kazakhstan telecom company TNS + (TNS Plus LLP). The buyer is the DAR group of companies, a partner of Veon. Read more here.

2023

Investment in Kyivstar

At the end of June 2023, Veon announced an investment of $600 million in Kyivstar. The funds will be used to develop and modernize the infrastructure of a telecom operator in Ukraine. Read more here.

The government agreed on the sale of VimpelCom, but with the terms

The government agreed on the sale of VimpelCom"" to the heads of a Russian company, but put forward conditions. The head Ministry of Digital Development Russia Maksut Shadayev announced this on February 3, 2023. More. here

2022

Purchase of VimpelCom business in Kazakhstan

The Russian mobile operator VimpelCom (operating under the Beeline brand) sold its parent company, the Dutch telecommunications holding Veon, a business in Kazakhstan for 54 billion rubles. This follows from the reporting of VimpelCom under IFRS, which was released in early May 2023. Read more here.

Top managers of VimpelCom buy out the operator from Veon

On November 24, 2022, VimpelCom announced the sale of the company to its leaders, including CEO Alexander Torbakhov. Under the terms of the agreement, Veon holding will help 130 billion rubles from the sale of the Russian asset. Read more here.

Start of sale of Russian business

VEON has announced the start of the process of selling Russian business, part of which is VimpelCom, the owner of the Beeline brand. The company announced this on November 3, 2022. Read more here.

Sale of Georgian business

On June 8, 2022, Veon announced the sale of the Georgian business to a former local partner of the company (his name was not disclosed). The transaction cost amounted to $45 million and corresponds to 3.5 times Veon Georgia's EBITDA for 2021. Read more here.

Veon sells stake in Algerian telecom company for $682 million

At the end of April 2022, the telecommunications holding Veon, which includes the Russian VimpelCom, named the value of the deal to sell a stake in the Algerian telecom operator Djezzy. Under the terms of the deal, the Algerian National Investment Fund will buy 45.57% of Djezzy for $682 million and increase its stake in this telecommunications company. Read more here.

The transfer of the parent holding from Bermuda to Britain

On February 3, 2022, Veon announced the transfer of the parent holding from Bermuda to Britain. Shares of the new company will be traded on Euronext Amsterdam and Nasdaq under the current ticker symbol Veon.

As the press service of Veon explained, it is planned to create a public limited liability company. It will serve as the Bermuda-registered Veon Ltd., the ultimate parent company of the Veon group.

Veon moves parent company from Bermuda to Britain

In the telecommunications group, which includes the Russian VimpelCom, the change of place of registration will allow Veon and its subsidiaries to operate more efficiently in their markets. Also, the change should provide "the necessary flexibility regarding the current and future tightening of regulatory requirements in many markets, including Russia."

The changes will not lead to one or another unpleasant tax consequences, Veon suggests. American depositary receipts and ordinary shares will be exchanged one to one for the securities of the new parent firm.

We do not expect any adverse tax consequences as a result of this change. In addition, we do not expect any material changes to the group's Veon corporate governance system, including the existing board and committee structure, the Veon press office said in a statement.

The Veon report notes that Britain is a jurisdiction with high corporate standards and a transparent legal framework, which is located near Amsterdam (the group's headquarters are located there).

Veon shares in Amsterdam rose 3.08% by the news - to €1.27 per share. On the American stock exchange Nasdaq, Veon securities closed trading on February 2, 2022, down 2.8%, follows from the data on the trading floor.^[1]

2021

Veon paid $957 million for the sale of cell towers in Russia

In early December 2021, the final amount of the transaction for the sale of Veon tower assets in Russia became known. 100% of the shares of National Tower Company JSC and about 15,400 antenna-mast structures were sold to the Service-Telecom group for $957 million, while initially the parties discussed the amount of $970 million. Read more here.

Access to the Moscow Stock Exchange

On November 26, 2021, Veon shares began trading on the Moscow Exchange. The securities are included in the third level of the listing, the trading code is VEON-RX.

The Moscow Exchange admitted Veon shares to trading at the main and additional (evening) trading sessions with settlements in rubles:

• in the main trading mode T + ("Glass T + 2," TQBR): 1 lot = 10 ordinary shares, minimum price step 0.02 rubles.
• in the trading modes "RPS" (PSEQ )/" RPS with Central Committee "(PTEQ): 1 lot = 1 ordinary share, the minimum price step is 0.02 rubles.
• in the trading mode "Incomplete Lots" (SMAL): 1 lot = 1 ordinary share, minimum price step 0.02 rubles.

Veon shares began to trade on the Moscow Exchange

It is noted that the initiator of the listing of Nasdaq shares was not Veon, but a trading platform.

We strive to provide investors with maximum opportunities for investment on our site and therefore allowed Veon to bid at the initiative of the exchange, - explained Andrei Braginsky, Managing Director for Communications of the Moscow Exchange, in a conversation with Interfax.

In his opinion, Veon shares will be of interest to institutional investors working on the site. Braginsky noted that by the end of November 2021, out of 50 million subscribers, VimpelCom"" Russia many have brokerage accounts at the Moscow Exchange and would like to invest in this telecommunications company.

In addition to the Moscow Exchange, Veon shares by the end of November 2021 are also listed on the Nasdaq and Euronext Amsterdam exchanges. Prior to the Nasdaq listing, the companies traded on the New York Stock Exchange (NYSE).

By 11.14 Moscow time on November 26, 2021, Veon shares were worth 139.7 rubles, which at the current exchange rate is 1.8% higher than the closing level on Nasdaq - $1.81 - November 24, 2021. On November 25, trading in the United States was not held in connection with the celebration of Thanksgiving.

Veon's free float on Nasdaq is 43.8%, another 8.3% of the group is managed by a Dutch trust - stichting.^[2]

Purchase of 67% of ELM for $16 million

In early September 2021, some details of the transaction for the sale of the advertising and technological platform OTM VimpelCom became known. From the materials of Veon (parent holding for the Russian telecom operator) it follows that the purchase of 67% of OTM cost VimpelCom $16 million. Thus, the entire company is valued at $24 million. The deal was closed in June 2021. Read more here.

Sale of stake in Djezzy and withdrawal from Algerian market

In early July 2021, Veon announced the sale of its entire stake in Djezzy to Algeria's public national investment fund FNI (Fonds National d'Investissement). The deal was concluded by exercising a put option on 45.57% of the shares of the Algerian telecommunications company. The financial component of the agreement is planned to be disclosed later. Read more here.

Purchase of the Russian OTM group of companies

On June 16, 2021, Veon announced the purchase of the Russian OTM group of companies. Its participants did not disclose the financial and other terms of the transaction. Read more here.

Leonid Boguslavsky joined the board of directors of Veon

On January 15, 2021, the telecommunications holding Veon announced the entry of Leonid Boguslavsky into the board of directors. He took the place of former commercial director and digital director of British operator O2 Mariano de Bira, who resigned from the board in December 2020. Read more here.

2020

Write-off of $723 million due to revaluation of business in Russia

On October 29, 2020, Veon published its financial report for the third quarter, in which it reported a write-off of $723 million due to the revaluation of its business in Russia. As specified in the company, the decision is due to a reduction in the share of VimpelCom and a decrease in revenue in the Russian market, which in turn negatively affected the fair value of the business.

In addition, according to Veon materials, the weakening of the ruble and the COVID-19 coronavirus pandemic, which caused travel restrictions, had a negative impact on the operator's performance. This, in turn, led to a decrease in revenue from highly profitable roaming, as well as a drop in income from migrant subscribers.

Veon wrote off $723 million due to revaluation of business in the Russian Federation

VimpelCom CEO Alexander Torbakhov noted that the financial results show some improvements in terms of revenue and EBITDA, despite the operational challenges facing the company.

In particular, the critical perception of the quality of the network and service, as well as the consequences of coronavirus restrictions. To overcome them, Beeline continues to implement an updated customer-centric strategy, investing significant resources in the modernization of the network, the development of digital service channels and the creation of positive customer experience in the mass market, while maintaining sustainable business growth in the B2B segment, he said, adding that the company's customers are already noting an improvement in the user parameters of the network.

In addition to Russia, Veon suffered losses due to Kyrgyz business. The telecommunications giant wrote off the full value of assets in the country and estimated the loss from this at $64 million. This is due to political instability in Kyrgyzstan and uncertainty associated with the return on investment in the Kyrgyz market. In the report for the third quarter of 2020, Veon also reflected the impairment of business in Kyrgyzstan due to unsatisfactory operating activities.^[3]

Purchase of Jazz

At the end of September 2020, the telecommunications holding Veon, which includes the Russian VimpelCom, announced an increase to 100% of its stake in the Pakistani mobile operator Jazz. Read more here.

VTB loan restructuring for RUB 30 bln

In July 2020, Veon's subsidiary Veon Holdings B. V. successfully refinanced an existing bilateral loan agreement with VTB Bank for 30 billion rubles, the company said.

It is noted that refinancing will extend the maturity and reduce the cost of the existing loan between VTB and Veon Holdings.

Sale of Armenian business

In early June 2020, it became known about the sale of the Armenian business Veon. The owner of the Russian VimpelCom sells Veon Armenia (works under the Beeline brand) to Team LLC, which is owned by brothers Ike and Alexander Yesayany, the founders of the mobile operator and Internet provider UCom. Read more here.

Loan from Sberbank for 100 billion rubles

In June 2020, VEON borrowed 100 billion rubles from Sberbank to refinance debts to it Sberbank said on Thursday that it provided VEON Holdings B.V. with a loan of 100 billion rubles so that the company could refinance debt to the state bank, as well as additionally finance the business.

VEON Holdings B.V. is a subsidiary of the global telecommunications holding VEON, which operates in 10 countries, including Russia under the Beeline brand.

"The bank is confident in the correctness of the long-term development strategy of the company and fully supports it in its desire to optimize the capital structure and increase financial flexibility," the press service of Sberbank said the words of the first deputy chairman of the board Anatoly Popov.

Warning about problems with paying salaries due to COVID-19

In the reporting for the first quarter of 2020, Veon spoke about the impact of the COVID-19 coronavirus pandemic on the company's activities. Veon reported that the outbreak of a new type of coronavirus led to a drop in revenue from roaming, device sales and the volume of payments at prepaid tariffs.

Transfers of migrants' money home have also decreased. In addition, Veon warned of possible delays in paying salaries to employees, especially in countries with weak development of non-cash payments.

The owner of Beeline warned about possible delays in salaries to employees

Due to the pandemic, Veon records failures in its distribution channels, the migration of the subscriber base from urban areas, a decrease in data traffic in mobile networks and an increase in fixed-line networks.

By the end of April 2020, due to the spread of the coronavirus, about 34% of VimpelCom's own communication salons (part of Veon) and 25% of franchises were closed - this led to a decrease in sales of subscriber equipment and SIM cards. The impact of these steps on VimpelCom's results is expected "in the coming months," Veon said on May 7.

Quarantine measures could accelerate the natural trend of increased online sales and potentially positively affect the market as a whole, as this could lead to a more balanced approach to sales with fewer points of sale in the future, the statement said.

Veon believes that the terms of payment under contracts with key manufacturers will be revised as measures to reduce the negative impact of COVID-19. In addition, the holding is optimizing expenses and capital expenditures. The company intends to focus on planned operational improvements during 2020, "which should help in the medium term," Veon said in a statement.

In a quarterly report, Veon said it was withdrawing its 2020 financial outlook due to uncertainty over the effects of the COVID-19 pandemic.^[4]

Appointment of Sergi Herrero and Caan Terzioglu as Veon Co-Leaders

On February 13, 2020, Veon (the parent company of VimpelCom) announced its resignation as executive director Ursula Burns. From March 1, the co-leaders of Veon will be Sergi Herrero and Caan Terzioglu. Read more here.

2019

Telenor exited Veon's equity

In November 2019, the Norwegian telecom holding Telenor finally left Veon, the parent company of VimpelCom"." The Norwegians sold the remaining 157 million shares (8.9%) of the company. The deal amounted to about $362 million, Telenor said in a statement on the stock exchange in. Oslo

At the same time, the news did not inspire investors: Veon shares are trading 2% below yesterday's price - $2.44 apiece at the close of the 21st against $2.40 per share today. According to the estimates of the Non-Digital Economy, the Norwegians sold shares at a 6% discount - for about $2.30 per share.

Telenor has been gradually exiting Veon's capital for several years. The Norwegian operator announced its intention to sell its entire stake in the fall of 2015, when it owned 33% of the company's capital.

In 2016, Telenor sold 163.9 million of the holding's ADS, reducing its stake in Veon to 23.7%.

In April 2017, the operator sold a 4% stake for $262.5 million, as a result of the transaction, the share decreased to 19.7%.

In September 2017, the Norwegian company sold 90 million ADS Veon for $365 million, reducing its stake to 14.7% of Veon.

In March 2019, Telenor announced the sale of another 5.7%.

On changes in strategy, capital allocation structure and future dividend policy

Telecommunications and digital services provider Veon Ltd. (parent company of PJSC VimpelCom, operating under the Beeline brand) announced in the fall of 2019 a change in strategy, capital allocation structure and future dividend policy. The company in the future sees itself as a "digital concierge" who will direct the choice of their customers and connect the resources appropriate for their needs.

The company outlined its future strategy and defined its capital allocation structure. Veon plans to continue to focus on the development of not only its traditional areas - communication services. The long-term positioning of itself as a telecommunications and digital service provider implies that Veon will act as a "digital concierge." It will direct the selection of its customers and connect the resources appropriate to their needs. This is stated in the company's message.

Veon plans to direct its revenue to three areas: the main telecommunications business (mobile and fixed-line services), new services using big data and artificial intelligence, as well as future assets (know-how and technology), which open up opportunities for growth in related areas. So far, telecommunications services remain the backbone of the Veon group. However, the company plans to gradually increase additional profits from new services and future assets.

At the same time, the distribution of capital will balance between capital investments in the fundamental development of the telecommunications business and investing in new growth points to return funds to shareholders through dividends or buybacks. The company promises that the updated dividend policy will provide sufficient flexibility in implementing the group's investment opportunities in a way that maximizes returns for shareholders.

Veon's revised dividend policy, coming from fiscal 2020, will aim to pay at least 50% of the prior year's free capital cash flow. The total amount of dividends and the phasing of payments for fiscal year 2019 will be announced with the results of Veon in early 2020. At the same time, dividend payments will still go to the board of directors of Veon. The Group's internal objective is to maintain net debt/EBITDA at around 2.0x (2.4x after IFRS 16).

2018

Ursula Burns is the new CEO of Veon

On December 13, 2018, Veon announced the appointment of Ursula Burns as CEO on a permanent basis. She has been acting head of the company since March 2018 - after the departure of the former CEO Jean-Yves Charlier. Read more here.

Refusal to sell cell towers for $940 million

On September 17, 2018, Veon announced the withdrawal of a deal to sell cell towers for almost $1 billion. We are talking about the business of the Pakistani "daughter" of the holding - Jazz.

The latter entered into an agreement with Tanzanite Tower Limited (owned by the edotco telecommunications group and the Pakistani investment company Dawood Hercules) in August 2017, under the terms of which it was supposed to transfer the tower division of Deodar for $940 million. It was assumed that Deodar would conclude an agreement with Jazz for comprehensive services, thanks to which Jazz could rent towers owned by Deodar.

Maternal holding "VimpelCom" refused to sell cellular towers for $1 billion

It was expected that the funds received from the transaction would be used for corporate purposes by Jazz, including to pay off part of the company's debt. 

In total, Deodar owns approximately 13 thousand towers by September 2018, and edotco owns more than 25 thousand towers in Malaysia (Axiata Group), Sri Lanka, Bangladesh, Cambodia, Pakistan and Myanmar.

Through the purchase of a network of telecommunications towers, Veon in Pakistan edotco could become their largest independent operator in South Asia, and Axiata could accelerate expansion in foreign markets.

Initially, they wanted to close the deal by the end of 2017, but the deadlines were delayed by regulators who closely considered the possible antitrust consequences of the agreement. September 14, 2018 was the last day of fulfillment of the terms of the contract, taking into account prolongation.

The parties were unable to obtain from regulators all approvals required for the deal, Veon said in a September 17 press release. The reasons for the lack of a positive decision from the regulators were not disclosed.

However, Veon never received regulatory approval, as a result it was forced to abandon the deal. In addition to business in Pakistan, the telecommunication giant owns assets Russia VimpelCom in (),,,,,, Tajikistan, Kazakhstan Kyrgyzstan Uzbekistan Armenia Georgia Algeria, Bangladesh and on. To Ukraine^[5]

Veon sells stake in Italian mobile operator

The Veon group (its Russian subsidiary VimpelCom operates under the Beeline brand) has agreed with Hong Kong CK Hutchison Holdings to sell it a stake in the joint Italian mobile operator Wind Tre. According to Veon, the transaction amount will be 2.45 billion euros or $2.87 billion^[6].

In 2011, Vimpelcom (formerly Veon) acquired from Egyptian billionaire Naguib Sawiris a 100% stake in Italian mobile operator Wind Telecomunicazioni and a controlling stake in Egyptian holding Orascom Telecom, which controlled mobile operators from Algeria, Pakistan, Bangladesh and other countries.

As a result of the transaction, the debt burden of Vimpelcom sharply increased: from $6 billion to $24 billion. Moreover, half of this debt fell on Wind Telecommunicazioni. As a result, Vimpelcom began to look for ways to consolidate its Italian asset.

In 2015, Wind Telecommunicazioni sold its towers to Albertis Telecom for €693 million. A little later, a partner was found for consolidation. Wind Telecommunicazioni, which was the third largest cellular operator in Italy, merged with the fourth largest operator, "3." Its owner was Hutchison.

2017

Launch of Microsoft cloud services in five countries

On December 11, 2017, Veon Microsoft and agreed to develop a partnership and provide cloudy services to corporate customers of the telecom operator in five countries:,,, Russia Italy To Ukraine Pakistan and. Kazakhstan

Infographic of partners in the project, (2017)

Veon joined the Microsoft Cloud Solution Provider initiative and became a provider of cloud products for the corporation:

• Microsoft Azure,
• Office 365,
• Skype for Business,
• Dynamics CRM,
• Enterprise Mobility Suite.

The products will be included in the package of mobile and fixed services to provide Veon B2B customers.

Veon sold the operator from Laos

The Veon group (formerly Vimpelcom) sold its "daughter" in Laos. According to the group, Veon sells 78% in the mobile operator Vimpelcom Lao for $22 million^[7].

The buyer will be the Lao government, which already owns 22% of Vimpelcom Lao. Thus, the country's authorities will become the only owners of this cellular operator.

MegaFon and Veon split Euroset

On July 12, 2017, MegaFon PJSC and Veon announced the termination of joint activities within the framework of Euroset's business. Based on the agreement reached between the parties, MegaFon will acquire a 50% stake in Euroset from VimpelCom and bring its ownership to 100%. At the same time, Euroset will remain on the market as an operating company. PJSC VimpelCom, in turn, will acquire half of Euroset's retail stores.

Veon accused of exporting military technology

The Dutch customs regulator launched an investigation into the Veon group in spring 2017. Veon is registered in Bermuda, and its headquarters are located in the Dutch capital Amsterdam "^[8]

According to the Veon report, the issues of customs officers are related to the rules of the European Union regarding the export of dual-use technologies - Eurodirective No. 428/2009. This document regulates the export of technologies and software that can be used both for civilian and military purposes.

The Dutch authorities are interested in the export and intermediary operations of Veon, which, mainly, relate to cooperation with the Uzbek "daughter" of the group - Unitel. Veon reported that they are cooperating with the Dutch authorities, but if violations are revealed, the companies may face fines, sanctions, reputational damage, etc.

Renaming the company to Veon

On February 27, 2017, it was announced that the Vimpelcom group was changing its name to Veon to position itself as a digital service provider. The same way is called the "revolutionary" Internet messenger, which is planned to be launched in all countries of Vimpelcom's presence, including Russia. ^[9] of^[9].

Operators included in the Vimpelcom group will have their own brands, including VimpelCom will have the Beeline brand.

According to one of the telecommunications analysts, the decision to rebrand VimpelCom may indicate that business in Russia and the CIS countries is no longer very important for the company's shareholders.

The decision to rebrand must be approved by Vimpelcom shareholders at an extraordinary meeting scheduled for March 30, 2017.

Launch of the Veon messenger

On February 27, 2017, Vimpelcom announced its intention to launch the Veon messenger in all countries of its presence. At the end of 2016, Veon was already launched by the Italian subsidiary Vimpelcom. Vimpelcom calls Veon a "revolutionary" Internet platform. The new service allows subscribers to exchange messages and photos, make calls, etc. There is no fee for using the service itself, it will work for subscribers even with a zero balance. Read more here.

2016

Telenor begins selling its package in the company

In September 2016, Telenor announced the beginning of the process of selling its stake in the holding to VimpelCom Ltd. Mikhail Fridman.

Norwegian Telenor explains the intention to withdraw from VimpelCom's capital by the end of 2016 by the lack of control and a decrease in VimpelCom's share in the value of its own core business.

Alfa Group does not intend to buy a 33% stake in the Norwegian Telenor holding VimpelCom Ltd., said in April 2016 co-owner of Alfa Group Mikhail Fridman. The group is not going to sell its stake in VimpelCom either.

The investment company LetterOne (L1) of Friedman and his partners at that time owns 47.85% of ordinary shares and 40.8% of the vote in VimpelCom. The share of ordinary shares of companies decreased in early April, after L1 transferred 8.3% of VimpelCom shares to the Dutch stichting trust.

Telenor also owns 305 million preferred shares, which have the right to vote, but are not traded on the exchange (only 43% of the vote).

Since October 2013, Norwegians have had the opportunity to convert prefas into ordinary shares, paying the market price for them, but did not take advantage of this opportunity. The conversion window closed on April 15, but Telenor previously said it had no plans to convert the prefs. Once the conversion period has expired, the prefs will be redeemed and the voting interests of L1 and Telenor will equal the common stock stakes.

Telenor owns 33% of VimpelCom's total outstanding common stock and has listed 8.1% of it, or 24.5% of ADS (American Depository Shares), for sale.

Telenor offers to buy 21,375,000 additional ADS at a public offer price that has not yet been determined^[10]

Telenor also announced the possibility of placing 3-year bonds exchanged for ADS VimpelCom worth up to $1 billion.

It was reported that Telenor will announce the sale price after the bookbuilding process is completed.

Morgan Stanley and JP Morgan are selected as joint global coordinators and bookrunners, while Citigroup and Credit Suisse will serve as host for the offering.

Telenor on October 5, 2015 notified the NASDAQ exchange of its plans to sell its stake in VimpelCom.

Plan for Creating a Single Network Management Center

On February 24, 2016, it became known about Vimpelcom's plans to create a single network management center for all companies included in the holding, including the Russian VimpelCom. The money for the implementation of this project will be taken from the budget in the amount of more than $100 million pledged for reorganization.

The creation of the Vimpelcom network management center in different countries was discussed on a teleconference with analysts, which took place in February 2016, Vedomosti reports, citing participants in this event.

According to media reports, Vimpelcom will create a single network management center for all companies included in the holding, including the Russian VimpelCom

According to them, Vimpelcom intends to rebuild all its IT processes, as a result of which the entire network will be managed from a single center, which in turn will receive data from regional hubs. Through this IT infrastructure upgrade, it is planned to build a more efficient network and reduce operating costs.

Sources of the newspaper did not name the amount of investment in the creation of a unified network management system, but said that Vimpelcom will spend part of the funds reserved for reorganization on this project - along with legal costs, this is $105 million.

A Vedomosti source close to VimpelCom says that the operator is creating a single network management center in Russia instead of the seven such points provided for each macro-region. In the future, this center should take over the management of networks in the CIS.

According to the publication, Vimpelcom is going to significantly reduce IT costs. One of the interlocutors knows that the board of directors set the task by 2017 to cut IT costs to 9% of those that take place by February 2016.

Earlier, the head of the telecommunications division of the LetterOne fund (which is the largest shareholder of Vimpelcom) Alexei Reznikovich said that the holding's IT systems are outdated, they consist of many levels and cannot adequately accumulate big data for subsequent work with them.^[11]

2014: Carrier sale in Canada

Vimpelcom agreed in September 2014 to sell the Canadian telecom operator Globalive Wireless Management (GWMC, operating under the Wind Mobile brand). The transaction cost amounted to 135 million Canadian dollars ($121.66 million).

The buyer of Wind Mobile is a consortium led by the operator's partner Glabalive Capital. The funds will be used to partially pay off Vimpelcom's debt. Globalive will also take over GWMC's debt to equipment suppliers for 160 million Canadian dollars ($145 million).

Vimpelcom became a co-owner of GWMC in 2011 when the company was merged with the Wind Telecom assets of Egyptian businessman Naguib Sawir.

According to data published by Vimpelcom, according to the results of 2013, the company had 600 thousand subscribers in Canada. As of December 31, 2013, the Canadian operator's debt on the principal loan amount and interest to GTH amounted to C $1.63 billion ($1.534 billion), and to Vimpelcom - C $154 million ($145 million). Loans were written off in the financial statements for 2013, said the representative of Vimpelcom Artem Minaev. All funds from Globalive will go to Vimpelcom accounts. Mr. Minaev called the reason for leaving Canada the impossibility of obtaining operational control over GWMC.

Canada became the fourth country Vimpelcom left after its takeover of OTH. The company previously sold subsidiary operators in Vietnam, Cambodia and Namibia. In addition, an agreement was reached on the sale of assets in Burundi and the Central African Republic, but due to hostilities in the latter, the deal has not yet taken place.

2012: Altimo buys Sawiris stake

Telenor and Mikhail Fridman's partners have repeatedly argued about the strategy and share of influence on assets that are jointly owned.

One of the high-profile public conflicts between them is the struggle for the Ukrainian market, which operates the operator Kyivstar, previously controlled by the Norwegians.

Telenor was opposed to VimpelCom entering the Ukrainian market, which Friedman offered with partners. In 2012, Telenor decided to fix the problem by increasing its voting stake in VimpelCom Ltd. from 25% to 36.36%, buying a stake from Egyptian businessman Naguib Sawiris for $374.4 million.

The Norwegian company sought to control the development of VimpelCom, increasing the number of its representatives on the holding's board of directors.

But the plans of the Norwegians turned out to be unrealistic. The deal did not materialize.

On August 15, 2012, Naguib Sawiris's company announced the sale of most of its stake in Vimpelcom (14.8% of voting shares) to Russian Altimo for $3.6 billion.

On September 28, 2012, Telenor sold 71 million preferred shares of Vimpelcom (3.44% of the holding's voting shares) for $113.6 million. After that, he left 0.04% of the ordinary shares that Saviris is going to sell on the stock exchange in the near future.

2011

• On March 17, 2011, Vimpelcom announced the results of an extraordinary meeting of shareholders to consider holding an additional issue of shares in favor of Egyptian billionaire Najib Sawiris as part of a merger with Wind Telecom, which he owns. The owners voted for 53.3% of the total number of shares that took part in the meeting, the quorum was 93.1%.

The Norwegian Telenor opposed, which owns 36% of the voting shares. Among minority shareholders, the majority also spoke out against - 60.2% of the total number of minority shareholders, only 39.8% voted in favor. However, the main support for the transaction was provided by the Russian telecommunications holding Altimo, which is the largest shareholder of Vimpelcom (owns 44.7% of the voting shares), which ensured the final result.

Telenor said that despite the defeat on the results of the vote, the company will help Vimpelcom increase its value through a merger with Wind Telecom. The Norwegian company said in a statement that if it were not for the features of Vimpelcom's share capital, due to which Altimo's preferred shares are voting, the additional issue would not have been approved: the owners of 51% of the voting shares would have voted against.

Also in the London arbitration, hearings will continue on Telenor's lawsuit against Altimo and Vimpelcom: the Norwegians demand to recognize their preemptive rights to repurchase the additional issue of shares, which will ensure that their share in Vimpelcom remains. Earlier, approving the merger with Sawiris, the supervisory board of Vimpelcom decided to consider it an interested party transaction, since Altimo minority shareholder Gleb Fetisov owns a 0.7% stake in one of the key assets of Wind Telecom - Egyptian holding Orascom Telecom Holdings (OTH). Telenor even asked the London court as interim measures to ban the holding of a meeting of Vimpelcom shareholders, but instead received assurances that if the arbitration was satisfied, the Norwegian claim Altimo and Vimpelcom would ensure that an additional issue would be held in favor of Telenor.

The shareholders of Wind Telecom as of March 2011 were Saviris Weather II (owns 67% of the shares, and including treasury securities - 72.65%) and a number of minority investors. Now 325.6 million ordinary and 305 million preferred shares of Vimpelcom will be issued in their favor, which will amount to 20% of the economic and 30.5% of the voting shares of the combined company. In addition, the sellers will be paid $1.5 billion in cash, thus, the total amount of the transaction will be $6 billion. Altimo's stake in Vimpelcom will decrease from 39.2% of economic and 44.7% of voting shares to 31.4% and 31% of shares, respectively, Telenor's share from 39.6% of economic and 36% of voting shares to 31.7% and 25%, respectively.

Vimpelcom, by acquiring Wind Telecom, takes a 100% stake in Italian mobile operator Wind and a 51.7% stake in OTH, which owns controlling stakes in mobile operators in Algeria, Pakistan, Bangladesh, Zimbabwe, Central African Republic, Namibia, Burundi, a block stake in Canada's Globalive Wirelless, and manages Lebanese operator Alfa. The number of Vimpelcom subscribers will increase from 87 million to 173 million, revenue in the first half of 2010 will grow from $5.3 billion to $10.5 billion, EBITDA - from $2.5 billion to $4.5 billion. At the same time, the company's debt will sharply increase - from $6.5 billion to $25.7 billion. To carry out the transaction and refinance the debt of the acquired assets, Vimpelcom intends to attract loans of $5.3 billion, including $2.5 billion from Sberbank.

Wind Telecom has a number of distressed assets in which the governments of the respective countries demand shares - these are operators from Algeria, Zimbabwe and Canada. Moreover, Orascom Telecom Algeria brings the OTH holding up to 50% of EBITDA, in connection with which Vimpelcom and Sawiris agreed to share the risks from the possible loss of this asset.

The terms of the deal also involve the separation of mobile operators from Wind Telecom and the transfer of mobile operators in Egypt and North Korea, Internet providers and web portals in Italy and Egypt, as well as the company's backbone business, including underwater cables between Italy and Greece and between Algeria and Pakistan. At the same time, Wind Telecom operators will be required to continue using the services of these trunk channels for 18 months. If it is impossible to allocate the above assets, Vimpelcom will have to pay Saviris up to $600 million. In addition, if the Egyptian operator ECMS not only does not remain with Sawiris, but also the second shareholder of this company - France Telecom - refuses the pre-emptive right to buy out the partner's share, Vimpelcom will have to pay another $170 million.

According to an analyst at Finam Management Management Anna Zaytseva, the risks posed by the deal with Wind Telecom overlap with the advantages of the merger. "In Russia, Vimpelcom significantly weakened its position in 2010, and the current markets for the company's presence are already quite saturated and highly competitive," the analyst said. - Against this background, entering new promising markets is the most optimal strategy for Vimpelcom to maintain high rates of business development. In addition, becoming one of the largest global operators will allow Vimpelcom to refinance existing debt on fairly acceptable terms. "

• In April 2011, Altimo Holding announced that it intends to reduce its stake in Vimpelcom to less than 25%. This will terminate the shareholder agreement with Norwegian Telenor and expand the influence on the company of its new shareholder - Egyptian billionaire Najib Sawiris. For more information, see Altimo.

• In April 2011, S&P downgraded VimpelCom's credit rating from BB + to BB, setting the forecast as "negative," the agency said in a statement. According to S&P, the rating is reduced due to the increased financial risks associated with the merger with Wind Telecom. At the same time, the agency raised the ratings of Orascom Telecom Holding and Wind Telecommunicazioni in connection with their entry into the VimpelCom holding. Long-term rating of Orascom Telecom Holdings is upgraded from B- to B, Wind rating - from B + to BB-. The outlook for ratings is "stable." S&P notes that VimpelCom's rating was reduced due to increased financial risks arising from the peculiarities of financing the transaction. Thus, the company was forced to take a bridge loan of $2.5 billion, which jeopardizes the liquidity situation in the company. According to S&P, this loan needs to be urgently refinanced in the next six months.

2010

Egyptian Sawiris contributes assets, gets money and stake in Vimpelcom

On October 5, 2010, Vimpelcom announced a merger deal with Weather Investments, owned by Egyptian Naguib Sawiris. Vimpelcom will pay Sawiris $1.8 billion and issue 325.6 million new voting shares in his favor, which will amount to 20% of economic and 18.5% of voting interest in the company. The assets that Sawiris will transfer are valued at $6.6 billion excluding debt. This is the largest transaction in the history of Russian telecommunications, the previous record was set two years ago by the same VimpelCom, which bought Beeline Golden Telecom for $4.24 billion^[12].

After the transaction, the share of Altimo (a subsidiary of Alfa Group) in Vimpelcom will decrease to 31.4% of economic and 36.4% of voting shares, Norwegian Telenor - to 31.7% and 29.3% of shares, respectively. Sawiris will win two seats on the board, which will be expanded from 9 to 11 people. Altimo and Telenor will each have three representatives on the board, with three more directors still independent of shareholders.

According to the results of 2009, the combined company's revenue will amount to $21.5 billion (before the merger, revenue was $8.7 billion), EBITDA - $9.5 billion ($4.3 billion), EBITDA margin - 44% (49%). Net debt will increase from $4 billion to $24 billion (2.5 times more than the EBITDA of the combined company), the number of subscribers will grow from 90 to 170 million. The number of countries in which the company operates will increase from 10 to 20.

The assets that Vimpelcom will receive will be 100% of the shares of the Italian mobile operator Wind Telecomunicazioni (Wind Italy) and 51.7% of the Egyptian Orascom Telecom Holding (OTH). The remaining shares of the holding will continue to be traded on the Cairo Stock Exchange. OTH owns majority stakes in cellular operators Orascom Telecom Algeria (OTA, Algeria), Mobilink (Pakistan), Bangalink (Bangladesh), as well as African holding Telecom Globe, which includes Central African Republic operators Telecom Centrafrique, Burundi and Namibia-based Leo and Zimbabwe-based Telecom Zimbabwe.

OTH's assets also have a 50% stake in Tunisian operator Tunisiana and a 65% stake in operator Wind Canada (with the holding owning only a minority voting stake in the Canadian asset). In addition, OTH operates the Lebanese operator Alfa. According to Vimpelcom CEO Alexander Izosimov, the company will try to increase its stake in assets in Tunisia and Canada, but in the second case this is not yet possible due to legislative restrictions. Regarding Lebanon, Vimpelcom will consider the feasibility of continuing the contract.

A condition of the transaction is the separation from the companies being sold of a number of assets, in particular, the Greek mobile operator Wind Hellas Telecommunications, the Egyptian Mobinil (a joint venture between OTH and France telecom), the North Korean Koryolink and some assets of Wind Italy (the Internet portal Libero, the operator of wholesale communication services Wind International Services and an underwater cable between Italy and Greece). This is due to Sawiris's desire, says the head of Vimpelcom.

Meanwhile, the problems of the holding's Algerian asset, OTA, have not yet been resolved. The company, which in 2009 brought in 37% of OTH's total revenue, received $600 million in tax claims and the Algerian government is considering nationalization. According to Izosimov, Vimpelcom intends to resolve this conflict and expects the support of the Russian authorities. Russia President Dmitry Medvedev will visit the country just tomorrow.

Investors initially took a negative view of Vimpelcom's intention to acquire OTH and Wind assets, which led to a drop in its quotations. Vimpelcom even considered the possibility of conducting an additional issue of its shares in favor of not only Sawiris, but also minority shareholders, but now this option is not being considered, says Izosimov. The head of Vimpelcom attributes the negative perception of the deal from the market to short-term sentiment among investors.

Consolidated revenue for the year (US GAAP, 2010) - $10.5 billion. Net profit - $1.67 billion.

Forced buyback of shares of VimpelCom OJSC

Shares of shareholders as of 2010:

• Altimo - 44,7%
• Telenor - 36%

On May 25, 2010, VimpelCom Ltd. began the process of forced buyback of shares with the aim of acquiring all remaining shares of VimpelCom OJSC at a price of 11,800 rubles. per share (which amounted to approximately $382.18 per share at the exchange rate as of May 25, 2010), as well as American depositary shares, at a price of 590 rubles. for one AD (which was approximately $19.11 at the exchange rate as of May 25, 2010) net of expenses and expenses retained by the Bank of New York Mellon. The redemption price was set at the market value of the share of OJSC VimpelCom, determined as of February 28, 2010 by an independent Russian appraiser in accordance with Russian law. The valuation was supplemented by a cost analysis carried out by Deloitte & Touche.

On August 9, 2010, VimpelCom Ltd. announced the completion of the acquisition of all shares of Vimpel-Communications Open Joint Stock Company (OJSC VimpelCom), including those represented in the form of American depositary shares (ADS), from the remaining minority shareholders as a result of forced redemption.

In accordance with the procedure for compulsory share repurchases under Russian law, VimpelCom Ltd. Paid for minority shareholders and holders of ADA of OJSC VimpelCom as of July 14, 2010 the funds due to them for redeemable securities, and their shares on August 9, 2010 were credited to VimpelCom Ltd. Thus, VimpelCom OJSC became a 100% subsidiary of VimpelCom Ltd..

2009

The revenue of the combined company (after the transaction with Saviris) in 2009 will amount to $21.5 billion (before the merger, revenue was $8.7 billion), EBITDA - $9.5 billion ($4.3 billion), EBITDA margin - 44% (49%). Net debt will increase from $4 billion to $24 billion (2.5 times more than the EBITDA of the combined company), the number of subscribers will grow from 90 to 170 million. The number of countries in which the company operates will increase from 10 to 20.

Notes