Telecom operator VEON seeks to sell Russian business

By Toby Sterling and Supantha Mukherjee

AMSTERDAM (Reuters) -Dutch telecoms operator Veon Ltd said on Wednesday it was seeking to sell its Russian operations, which make up more than half of its revenue and earnings.

Many companies have sought to reduce exposure to Russia since the start of the Ukraine conflict in February and have halted or terminated operations there.

Veon, which also has operations in Ukraine, Pakistan and Kazakhstan, said it was conducting a "competitive sales process" for the business, which operates one of Russia's biggest mobile networks under the Beeline brand.

"There can be no assurance that the sales process mentioned above will result in an acceptable offer or, even if an acceptable offer is obtained and results in an acquisition agreement being reached, that the requisite approvals will be received," the company said in a statement.

Veon's shares rose as much as 11% in thin trade in Amsterdam, to 0.50 euros. Veon's shares have traded near record lows since tumbling after Russia sent its armed forces into Ukraine in February, which Moscow calls a "special operation".

Credit rating agencies S&P and Fitch have withdrawn ratings for Veon, which had $8.1 billion in net debt and $3.2 billion in cash liquidity as of Oct. 7, based on recent company statements.

The outcome of the sale will be important for shareholders and creditors as Veon's non-Russian businesses are profitable on an operating basis but small in relation to the company's debt.

Veon's position is complicated due to its presence in Ukraine, where it has struggled to keep the Kyivstar mobile network operating throughout the conflict.

CEO Kaan Terzioglu told Reuters in March he hoped the company would be allowed to continue operating in both markets as an essential service.

The company said on Wednesday it hoped to broker the best possible outcome for the company, shareholders, creditors, customers and employees "both inside and outside Russia".

"There has been no request from any government for VEON to sell its Russian operations," a spokesperson told Reuters on Wednesday. More than half of Veon's 44,500 employees are in Russia, based on the company's 2021 annual report.

Beeline had earnings before interest, taxes, depreciation and amortisation (EBITDA) of 20 billion roubles ($325 million) through the first eight months of 2022. It competes with larger rival MTS, as well as Megafon and Tele2.

Veon's group total EBITDA in the same period was $604 million.

(Reporting by Juliette Portala, Toby Sterling; editing by Lincoln Feast, Jason Neely and Jane Merriman)