MOSCOW :Amsterdam-listed mobile operator Veon said on Thursday it would sell its Russian business, Vimpelcom, to senior members of the Vimpelcom management team, led by CEO Aleksander Torbakhov, for 130 billion roubles ($2.2 billion)
Veon operates the Beeline brand through Vimpelcom in Russia, a market that accounts for about half of group revenue. Veon also operates Beeline in Kazakhstan and Kyivstar in Ukraine.
Veon, which expects the transaction to be complete by June 1, joins a growing list of Western companies that have sold assets in Russia since Moscow sent tens of thousands of troops into Ukraine on Feb. 24.
Veon said the management buyout of Vimpelcom implied an expected enterprise value of approximately 370 billion roubles. Though Veon is selling at a discount, the transaction represents a relatively rare example of money changing hands between parties as companies race to exit Russia.
Japan's Nissan took a $687 million loss in handing over its business in Russia to a state-owned entity for one euro, mirroring an earlier move by Renault which sold its majority stake in Russia's Avtovaz for one rouble. Many companies have not disclosed the price of their divestments.
The agreement includes a provision that enables Veon to benefit from Vimpelcom selling at a higher valuation for a period of 30 months after the deal closes.
Veon's shares rose 8.6 per cent in thin trade in Amsterdam to 0.57 euros as of 1532 GMT. The shares have traded near record lows since tumbling after Russia began what it calls its "special military operation" in Ukraine.
"The management buyout of our Russian operations will benefit all involved," Veon CEO Kaan Terzioglu said in a statement to Reuters.
"Customers and employees will see a seamless transition, investors and bondholders will see a deleveraging of our balance sheet, and Veon will be able to focus on our digital operator strategy across our portfolio of operating countries."
Veon's Kazakhstan operations will be transferred to Veon Holdings as part of the transaction and certain inter-company loans will be extinguished, Veon said.
Torbakhov said the deal marked an important milestone for Beeline.
"The top management team represented by me, Svetlana Kirsanova, Maxim Zaikov, Valeriy Shorzhin and Renat Nasretdinov managed to form the most balanced offer for Veon Group, that ensured its victory in the competitive process on selling the asset," Torbakhov said.
($1 = 60.3500 roubles)