Global digital operator Veon announced on Tuesday that it has signed a deal to sell its 50.1% indirect stake in mobile operator Beeline Kyrgyzstan to CG Cell Technologies, a wholly owned subsidiary of CG Corp Global.
Veon’s stake is held by VIP Kyrgyzstan Holding AG. CG Corp Global is a multinational conglomerate headquartered in Dubai with presence in various sectors including FMCG, hospitality, education, communications, financial services, infrastructures and real estate.
No specific financial details were disclosed, but Veon said the transaction values Beeline Kyrgyzstan’s business at 3.4x 2023 EBITDA (pre-IFRS16). According to Veon’s annual results released last week, Beeline Kyrgyzstan’s EBITA for FY2023 was US$22 million.
Veon also said the sale is part of its strategy to simplify the Group’s structure and focus on its large markets where it can create scale with its ‘DO1440’ digital operator model, providing digital services in finance, entertainment, healthcare and education.
That said, Veon’s 2023 results also show that while Beeline Kyrgyzstan has been doing well in terms of revenue growth and EBITDA, it’s also the lowest revenue contributor to the Group, compared to Veon’s operations in Ukraine, Pakistan, Kazakhstan, Bangladesh, Uzbekistan and Georgia.
For example, Beeline Kyrgyzstan’s total revenue for FY2023 was US$56 million, up 13.1% year on year. However, that was the lowest revenue figure in the group, with Beeline Uzbekistan the next highest contributor with US$269 million.
In any case, Veon group CEO Kaan Terzioglu said he was “proud” of Beeline Kyrgyzstan’s progress under Andrey Pyatakhin, who was appointed as CEO of of the telco in December 2021.
“Over the past two years, we have transformed Beeline Kyrgyzstan into a winning operation, with seven consecutive quarters of double-digit revenue growth, high penetration and quality of 4G services and solid foundations in digital offerings,” Terzioglu said.
In a statement, CG Corp Global said it is “pleased to become a major investor in the Kyrgyzstan telecommunications market with the purchase of the majority stake in Beeline Kyrgyzstan. We are excited to cooperate with our partners in this joint venture as we continue to develop the business, ensuring that customers continue to get the modern, high-quality and reliable connectivity and digital services they have come to expect.”
The sale’s completion is subject to relevant regulatory approvals
