Veon, the Amsterdam-listed mobile operator owned by Pyotr Aven, announced on Monday. the 9th of October, that it is leaving the Russian market altogether. Veon has completed the sale of its Russian-owned Vimpelcom to the company’s management, led by CEO Alexander Torbachev, reports Reuters.
“The transaction does not include any buy-back options and represents Veon’s complete exit from the Russian market,” the company said in a statement.
Vimpelcom has now become a fully Russian company.
“The transaction opens up new opportunities for the company,” Torbahov said in a separate statement. “We have freed ourselves from restrictions and will now become even more mobile and open for business development in Russia.”
In November 2022, Veon announced plans to sell Vimpelcom for 130 billion roubles (1.28 billion US dollars). But last month the company said that amendments to the sale and purchase agreement had not materially affected the terms of the deal, which had already been agreed in November last year.
When the details of the proposed transaction were first made public, it was estimated to be worth around 2.1 billion US dollars. Since then, the rouble has lost about a quarter of its value.
We can observe a trend of Russia continuing to make it
more difficult and complicated for Western companies to leave the country,
which began after the invasion of Ukraine in February 2022. Business leaders point out that it is becoming increasingly difficult to comply with all the new requirements.
Vimpelcom’s management buyout offer initially put the value of the company at around 370 billion roubles. But the amount was halved because Russia approved the sale of foreign assets only after a 50% discount.
The Veon sale is one of the rare examples of a Western company selling its business in Russia for a relatively significant sum. Many companies have sold factories and brand rights for a symbolic price. There are also cases where Moscow has unilaterally seized properties and appointed its own administrators.
Veon’s financial advisor was Aspring Capital, an investment bank with extensive experience in helping Western companies exit the Russian market.
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