What happened
Russia and Central Asia-focused telecom Veon(NASDAQ: VEON) had some excellent regulatory news to impart on Wednesday, and as a result, its U.S.-listed shares popped by 10%. The company is now free to pull the lever on a massive divestment, a situation that investors found extremely encouraging.
So what
That morning, Veon announced in a press release that on Tuesday, it obtained approval from Russian regulators to sell its operations in that country.
Specifically, the Sub-Commission of the Government Commission for Control over Foreign Investments has turned on the green light for Veon's proposed sale to senior members of the management of a related entity, PJSC VimpelCom. The name VimpelCom, incidentally, was a previous moniker for Veon.
Although Veon has roots in Russia, the telecom's official domicile is The Netherlands.
Before the Commission's approval, Veon had been granted permission by Russia's Federal Antimonopoly Service to effect the transaction.
In its press release, Veon said that now that the way forward is clear and the remaining closing conditions should be met, the deal will occur on or prior to June 1.
In November 2022, Veon said it had agreed to the sale, which was valued at 130 billion rubles ($1.82 billion). The company quoted its CEO, Kaan Terzioğlu, as saying that the sale "is expected to be accretive to equity, reduce Veon's debt, and improve its credit profile."
Now what
Considering that the Russian economy is under heavy pressure from sanctions arising from the war in Ukraine, it's hardly a beneficial environment for business just now. That investor reaction surely included a great deal of relief.
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