TeliaSonera has agreed to sell its 60.4 percent ownership in the Nepalese operator Ncell to Axiata, one of Asia’s largest telecommunication groups, for USD1 billion on a cash and debt free basis.
At the same time, TeliaSonera will dissolve its economic interests in the 20 percent local ownership and receives approximately USD 48 million. The transactions are conditional on each other.
“In September we announced our ambition to reduce our presence in our seven Eurasian markets and focus on our operations in the Nordics and Baltics, within the strategy of creating the new TeliaSonera. Today, I am very pleased to announce a first step and proof point in this reshaping of TeliaSonera,” says Johan Dennelind, TeliaSonera’s President and CEO.
TeliaSonera divests its direct ownership of 60.4 percent to Axiata for USD 1,030 million on an cash and debt free basis, corresponding to an EV/EBITDA multiple of 5.0 times based on rolling twelve months. Ncell had a net cash position of approximately USD 284 million, after purchase price adjustments, as of September 30, 2015, and TeliaSonera will be paid for the cash position at closing in proportion to its economic interest of 80.4 percent.
Over and above 60.4 percent, TeliaSonera consolidates a further 20 percent in Ncell, an ownership which is today held locally by Mr. Niraj Shrestha. According to current Nepalese regulation, 20 percent of the ownership in a company is required to be held locally by a Nepalese citizen. All arrangements between TeliaSonera and Mr. Niraj Shrestha, which were entered into in 2012, will lapse in conjunction with closing.
As part of the divestment of Ncell to Axiata, TeliaSonera will dissolve its economic interests in the 20 percent local ownership and will receive approximately USD 48 million from Sunivera Capital Ventures Pte Ltd, a Singapore registered company. Mr. Niraj Shrestha will sell his locally held shares to Mrs. Bhavana Singh Shrestha, who is Axiata’s chosen local partner.
As part of the transaction, Visor will sell its 19.6 percent of Ncell to Axiata.
“To make a responsible exit is of utmost importance for us. We will continue our good cooperation with the Nepalese government in our engagement of rebuilding Nepal after the earthquake,” says Johan Dennelind.
The divestment, all transactions included, results in a positive net cash effect for TeliaSonera, corresponding to approximately SEK 7.5 billion after provisions, primarily related to tax. The effect on net income is expected to be minor and still dependent on fluctuations of currencies until closing.
The expected divestment proceeds will primarily be used for debt reduction.