Kazakhtelecom to buy 75% stake in Kcell from Telia, Turkcell

Kazakh state-controlled telecommunications firm Kazakhtelecom is buying a 75 percent stake in local mobile operator Kcell from Sweden’s Telia and Turkcell, Kazakhtelecom and Telia said on Wednesday.

Telia and Fintur Holdings, jointly owned by Telia and Turkcell, will sell their stake in Kcell for $446 million, implying an enterprise value of $771 million for 100 percent of Kcell on a cash and debt free basis.

Telia announced in 2015 it would retreat from Central Asian markets and instead refocus on growing its core Nordic operations after being hit for years by investigations into alleged corruption linked to local partners and problems accessing cash in distant countries.

After this deal, Telia has business in Moldova left to sell to complete its exit.

“I’m glad to announce that we have entered into an agreement to divest our and Fintur’s stake in Kcell, thereby in all material aspects completing the journey of exiting Eurasia,” Telia Chief Executive Johan Dennelind said in a statement.

The Kcell transaction is expected to result in a gain of around 1.1 billion Swedish crowns ($122 million) for Telia’s 24 percent share before reclassification of accumulated foreign exchange losses of 900 million crowns to net income from discontinued operations.

In a separate deal, Telia has agreed to buy Turkcell’s share in Fintur, which enables Telia to repatriate cash from Fintur, Telia said.

The Kcell transaction has been approved by the anti-monopoly authority in Kazakhstan and Telia said its divestment was expected to be completed in December.

Reuters