Tele2 proposes using proceeds from Kazakhstan, Netherlands deals for shareholder payout; Croatian exit still requires regulatory OK

Tele2 late last week announced that it has completed the sale of its operations in Kazakhstan to business partner Kazakhtelecom, continuing its renewed focus on its Nordic and Baltic markets.

The telco exercised a put option that enabled it to exit its Kazakhstan joint venture three years after it brokered the tie-up with Kazakhtelecom’s Altel mobile business.

The terms of the deal valued the Kazakhstan business at US$800 million (€703 million) and left Tele2 with net proceeds of $169 million. It also received full repayment of a shareholder loan afforded to the business, which amounted to 80 billion Kazakhstani tenge (€185 million).

Tele2 owned a 49% stake in the business, with 51% of the voting rights.

When Tele2 announced its decision to pull out of Kazakhstan earlier this year it noted that the decision was in line with its plan to focus on its Nordic and Baltic operations.

Indeed, in January the operator completed the merger of its operations in the Netherlands with those of rival T-Mobile, receiving €190 million in cash and a 25% stake in the enlarged T-Mobile.

It will now hold and extraordinary general meeting on 22 August at which shareholders will vote on a proposal to use the proceeds from both sales to pay an extraordinary dividend. If approved, the 6 kronor-per-share dividend will equate to a total payout of SEK4.1 billion (€388 million).

Until recently, Tele2 categorised Kazakhstan as one of its ‘investment markets’, the other being Croatia. The telco in May agreed to sell its business in Croatia to Amsterdam-based United Group for €220 million. The deal is subject to regulatory approvals, but the telco expects it to close by the end of the year.