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A telecoms group with ties to two sanctioned oligarchs plans to list its Ukrainian business in New York via a special purpose acquisition company, after its corporate rights in the subsidiary were unfrozen by authorities in Kyiv.
Dubai-based Veon, whose largest shareholder is the LetterOne Investment Holdings company co-founded by Mikhail Fridman and Petr Aven, on Monday announced the signing of a letter of intent with US-based Cohen Circle to list Kyivstar indirectly on the Nasdaq stock market.
Kyivstar is Ukraine’s largest telecoms operator, and recently struck a deal with Elon Musk’s Starlink to introduce direct-to-mobile satellite connectivity in a country where infrastructure has been severely damaged by Russian forces during almost three years of war.
The deal comes after a Kyiv district court in November ruled in favour of a request to unfreeze almost 48 per cent of Veon’s corporate rights in Kyivstar and 100 per cent of Veon’s corporate rights in its other Ukrainian subsidiaries, according to the company.
Veon previously said that the sanctioned individuals did not own any shares in the company or in Kyivstar.
LetterOne had a 45.5 per cent stake in Veon as of September, but the London-based company said in 2022 that Fridman and Aven had stepped down from its board after they were hit with sanctions from the EU. The EU’s General Court in April annulled the inclusion of Fridman and Aven on the bloc’s sanctions list from 2022-23 and the pair, who remained under sanctions under a separate EU legal designation, were last year challenging those in legal proceedings.
LetterOne at the time said the pair, who co-founded LetterOne in 2013 as a vehicle to manage proceeds from the sale of their stakes in Russian oil company TNK-BP, had no involvement over the business with their assets in effect frozen. They jointly owned less than 50 per cent of its shares.
Veon said Kyivstar, which in 2023 reported earnings before interest, taxes, depreciation and amortisation of $541mn, would become the “first purely Ukrainian investment opportunity to be publicly listed on a US stock exchange”.
Veon chief executive Kaan Terzioğlu said the process would make Kyivstar “a unique US-listed opportunity for international investors while also highlighting the overall investment case for Ukraine”. He added it was a “significant step” in its ambition of crystallising value for its investors, including through the listings of key assets. Nasdaq-listed Veon will hold a majority stake in the new publicly listed entity.
Cohen Circle co-founder Betsy Cohen said Kyivstar had “all of the qualities we look for as a merger partner — strong business fundamentals, excellent management and opportunities for outsized growth”.
Veon has undertaken a series of changes in recent months, having moved its headquarters from Amsterdam to Dubai in December, and consolidated its share trading on the Nasdaq in November with its common shares no longer listed or traded on Euronext Amsterdam.
Its board of directors includes Mike Pompeo, the former US secretary of state, and Sir Brandon Lewis, a former UK government minister. It operates across six countries including Pakistan, Bangladesh, Kazakhstan, Uzbekistan and Kyrgyzstan.
Veon previously announced a commitment to invest $1bn in rebuilding Ukraine’s digital infrastructure between 2023 and 2027. It exited Russia with the closing of the sale of its operations in the country in 2023.
