The Netherlands-based operator, VEON, has announced its exit from Kyrgyzstan, selling its majority stake in Beeline Kyrgyzstan to CG Cell Technologies, a subsidiary of Chaudhary Group (CG Corp Global). The transaction will see VEON transfer its entire 50.1% stake to CG Corp Global, valuing the company at 3.4 times its EBITDA by 2023.
According to VEON’s most recent financial report, Beeline Kyrgyzstan’s EBITDA for 2023 was USD 22 million, making the transaction for 50.1% worth approximately USD 37.5 million. Verny Capital owns the remaining 49.9% of the business.
“We are very pleased to become a major investor in the Kyrgyzstan telecommunications market with the purchase of the majority stake in Beeline Kyrgyzstan,” said CG Corp Global in a formal statement. “We are excited to cooperate with our partners in this joint venture as we continue to develop the business, ensuring that customers continue to get the modern, high-quality and reliable connectivity and digital services they have come to expect.” The sale is subject to the usual regulatory approvals.
Beeline Kyrgyzstan has expanded significantly over the last two years, with VEON CEO, Kaan Terzioğlu, highlighting the unit’s “seven consecutive quarters of double-digit revenue growth, high penetration and quality of 4G services and solid foundations in digital offerings.”
Despite this, VEON’s Kyrgyzstan business is the smallest of its international operations, generating only USD 56 million in revenue in 2023. In contrast, Uzbekistan, the company’s next smallest market, generated USD 269 million during the same period.
Notably, VEON, which also operates mobile networks in Ukraine, Pakistan, Kazakhstan, Bangladesh, Uzbekistan, and Georgia, has faced challenges in recent years. After the Russian invasion of Ukraine in 2022, the operator withdrew completely from Russia and sold its unit to senior management members by the year’s end. Presently, the company is focusing on strengthening its Kyivstar operations in Ukraine, committing to invest USD 600 million to reconstruct and enlarge the networks over the next three years.
VEON’s decision to divest its majority stake in Beeline Kyrgyzstan marks a strategic move with significant implications. This shift signifies VEON’s recalibration of its operational focus, likely aimed at optimizing its resources and consolidating its presence in key markets. For CG Cell Technologies, this acquisition opens doors to expand its footprint in the telecommunications sector, potentially injecting fresh momentum into Kyrgyzstan’s telecom landscape. Moreover, it underscores the evolving dynamics of global telecommunications, highlighting the importance of strategic alliances and divestments in navigating an increasingly competitive industry landscape.
