Swedish telco raises over €300 million from sale of shares in Russian operator
Telia Company has sold down its stake in Russia’s MegaFon as part of its ongoing plan to exit it Eurasia operations.
The Sweden-based operator announced that it has offloaded around 6% of its shares for 3.2 billion kronor (€334 million), leaving it with around 19% of the company’s issued share capital.
Telia plans to reclassify its MegaFon stake as a financial investment from the fourth quarter of this year, having previously accounted for it as an associated company.
"Telia Company is one of the founders of MegaFon and we have since the inception actively contributed to its success of becoming a mobile and digital leader in Russia," said Telia chief executive Johan Dennelind.
MegaFon was Russia’s second-largest mobile operator by subscribers at the end of last year, with a market share of 30%, according to consultancy firm Advanced Communications & Media. It had 75.6 million subscribers.
"As we are now focusing on the Nordic and Baltic regions within the framework of our New Generation Telco strategy, it is natural that we reduce our exposure to MegaFon," Dennelind said.
Nonetheless, following the transaction, Telia remains the second-largest shareholder in MegaFon and has committed to working with the company’s main owner, the USM Group, going forward.
Telia announced its decision to sell out of its Eurasian operations two years ago and has since offloaded assets in Nepal and Tajikistan, and is working on the disposal of its stake in Fintur Holdings, a joint venture with Turkcell that holds stakes in Georgia’s Geocell, Moldova’s Moldcell, and Azercell in Azerbaijan.
Last month Telia sold its remaining direct stake in Turkcell for around 4.13 billion kronor (€433 million).
It is also looking to sell off Ucell, its troubled asset in Uzbekistan, where allegations of corruption led to Telia becoming the subject of investigations by U.S. and Dutch authorities in 2014.
Last month Telia announced it had reached a settlement with those authorities and would pay financial penalties of close US$1 billion as a result.