Telenor aims to raise $259m by selling more of Veon/VimpelCom stake

07 April 2017 | Alan Burkitt-Gray

Norwegian operator Telenor is hoping to raise $259 million by reducing further its stake in the former VimpelCom – now called Veon.

The company announced overnight that it was selling 70 million shares in Amsterdam-based Veon, which has extensive interests in Russia, Italy and a number of other countries. Early this morning it set a price of $3.75 per share, resulting in net proceeds of $259 million.

The sale will reduce Telenor’s stake in Veon from 23.7% to 19.7%, meaning that Telenor no longer needs to treat Veon as an associated company in its financial statements. “The effects of reclassification do not impact the total equity of Telenor,” said the Oslo-based company.

This is only the latest stage in a continuingly difficult relationship between Telenor and the former VimpelCom.

A year ago a report from Deloitte prompted the resignation of two senior Telenor executives, including CFO Richard Aa, after it criticised them for “internal weaknesses” and “insufficient” handling of corruption allegations at VimpelCom.

Before this morning’s action, Telenor had already reduced its stake in stages. Back in 2012 it owned 42.95% of the company. Two years ago it was 33%, and Telenor is known to want to sell all of its shares by the end of 2017.

Veon is now largely under the control of LetterOne Technology, a sister company of Russia’s Alfa Group, both controlled by businessman Mikhail Fridman. It owns Russian operator Beeline and has a 50% stake in the recently created Italian joint venture with CK Hutchison’s Three. It also has businesses in Kazakhstan, Ukraine, Kyrgyzstan, Uzbekistan, Armenia, Georgia, Tajikistan, Algeria, Pakistan and Bangladesh. 

Telenor said it “will not comment beyond today’s announcement at this point in time. The pricing of the offering will be announced following the completion of the bookbuilding process.” Citigroup and Morgan Stanley will act as joint global coordinators and joint bookrunners for the offering.