Telenor Group agreed to sell its troubled Myanmar unit to M1 Group for $105 million, with the Lebanon-based investment company to acquire 100 per cent of the shares and ensure continued operations.
Sigve Brekke, Telenor president and CEO (pictured), cited increasing difficulty in conducting its business in Myanmar in recent months as a factor in the choice to sell. Some $55 million of the total sale price is in deferred payments over five years and the transaction implies an enterprise value of about $600 million.
Citing challenges “for Telenor, for people security, regulatory and compliance reasons”, the company “evaluated all options and believe a sale is the best possible solution”, Brekke explained.
Telenor stated the current environment made it impossible to “conduct an ordinary sales process”, noting it decided to exit following further “deterioration of the situation and recent developments in Myanmar”.
Last week, Telenor played down speculation regarding its next steps in Myanmar, where an impairment loss of NOK6.5 billion ($740.5 million) booked in Q1 dragged the parent company to a net loss of NOK3.9 billion from a NOK698 million profit in Q1 2020.
The Myanmar government in March ordered operators to shut access to internet services following a coup and political unrest.
Telenor explained it had invested a total of NOK5.3 billion into the unit since launching in 2014, with it turning cash flow positive in 2017.
M1 Group owns and manages investments across a range of sectors and holds a 10 per cent stake in South Africa-headquartered MTN Group.Subscribe to our daily newsletter Back