On Wednesday night, Telenor decided to sell its operations in Myanmar due to the situation in the conflict-torn country. – This is a very sad day, says the top manager about sales.
Telecommunications company Telenor has agreed to sell 100 percent of its mobile business in Myanmar to the M1 Group for $ 105 million, or $ 900 million, according to a report.
Million 55 million, or about 70 470 million, will be paid in five years.
– This is a very sad day, now that we are leaving the country it is sad not only for Telenor but also to see what is happening in Myanmar, CEO Seikwe Breke tells E24.
Brecke says the company is “considering a number of alternatives in recent weeks” and that the process “has been going on until recently” before it was signed on Wednesday night.
– How much does it cost to organize this?
– I have no statistics on this, but it has taken us a long time in terms of resources, and we have been very close to the situation on the ground and at the team level since February 1st. That’s how it is, says Brake.
The deal is estimated at about $ 600 million, or NOK $ 5.2 billion. It says M1 Group, an investment firm based in Beirut, Lebanon, will acquire all the shares in Telenor Myanmar and continue to operate the company.
– The new owner was very impressed with what we have achieved in the country since 2014, and they have seen how much it has benefited us with the initial positive cash flow and significant dividends, says the senior manager.
The Court of Appeals maintains a large fee for Telenor
– Everything became very challenging
In May, it was reported that Telenor had written off Myanmar investment of NOK 6.5 billion.
– How far were you in the sales process at the time?
– This situation has been demanding since February, when we thought carefully before deciding that over-selling to our customers would be the best solution for us, but for our 730 employees at the company, he says.
Brecke points to the following conditions as particularly challenging in Myanmar:
- Employee safety
- Regulatory conditions
- Business practice
– Everything turned out to be very challenging, and as we write the investment, we found a good balance between the three things. Since then, it has become more in demand, which has led to sales today, Brecke explains.
– Are you guaranteed that employees will keep their jobs?
– The new owner takes over the entire company with employees and operations, and the new owner stops his team. They also impress with what we have achieved in the country since we entered 2014, but I do not know what kind of vision they have, the senior manager explains.
Brecke does not want to speculate about further developments in conflict-torn Myanmar, and points out that the situation “depends on the current authorities.”
Telenor entered Myanmar in 2013 and started a mobile business in 2014 after Aung San Suu Kyi was released from house arrest and the military junta opened for elections. Telenor’s entry had the firm support of the government and the investment was successful – much faster than expected.
Myanmar has become an important new growth driver for Telenor in Asia, operating in Bangladesh, Pakistan, Malaysia and Thailand.
On February 1 this year, the situation changed abruptly. The military launched a coup and seized power from elected representatives, which has led to widespread unrest, large-scale demonstrations and violence against civilians.
The company said the military regime’s restrictions on mobile networks had “roughly halved” Telenor’s daily traffic and subscription revenue.
– The situation in Myanmar has been challenging Telenor in recent months regarding the safety, regulatory conditions and good business practices of our employees. We have considered all the possibilities and believe that the best solution in this situation is the sale of the business, the CEO said in a statement on Thursday morning.
– The deal to sell Telenor Myanmar to the M1 Group will ensure that operations continue. Telenor entered Myanmar with the hope that affordable mobile services would contribute to the growth and development of the country. I am grateful to all our staff and partners who have made a significant effort to build a company that has made a positive contribution to the people of Myanmar, and have provided high quality telecommunications services in the presence of Telenor in the country.
Telenor’s market value is NOK 207 billion after falling 18 percent since the beginning of the year.
This transaction is subject to regulatory approvals in Myanmar.