VEON Ltd. (NASDAQ: VEON) rose sharply after the company agreed to sell 50% stake in Wind Tre to CK Hutchison for $2.867 billion. The company also offered to acquire GTH assets in Pakistan and Bangladesh for $2.55 billion.
The Amsterdam-based VEON, which prides itself on being a leading provider of connectivity and internet services, announces two major transactions today. The Company has entered into an agreement with CK Hutchison Holdings Ltd. for the sale of its 50% stake in Wind Tre.
It has also submitted an offer to acquire the assets of Global Telecom Holding S.A.E in Pakistan and Bangladesh.
The sale of VEON's equity stake in Wind Tre will bring in proceeds of EUR 2,450 million. A fraction of these proceeds will be used by VEON to acquire the GTH assets. The remainder will be used to reduce debt which, following completion of both transactions, will result in net pro-forma leverage ratio1 of approximately 1.8x, significantly below our target ratio of 2.0x.
These transactions represent two critical steps towards our ambition to simplify the Group's structure and enhance shareholder value.
According to VEON Executive Chair Ursula Burns, "Our goal is to drive greater value for our shareholders through a more focused and optimized portfolio.
"To this end, the company has identified four immediate priorities: simplifying the Group's structure, increasing our operational focus on emerging markets, strengthening the Group's balance sheet and supporting the company's current dividend policy. Today's transactions are important steps towards this goal."
Shares added 40 cents, or 16.7%, to $2.79.
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