The move, just two weeks after Telia cut its holding in Turkcell, follows the Swedish group’s policy to focus on Scandinavia and the Baltic states and sell off investments further away.
Johan Dennelind, president and CEO, said: “Telia Company is one of the founders of MegaFon and we have since the inception actively contributed to its success of becoming a mobile and digital leader in Russia. As we are now focusing on the Nordic and Baltic regions within the framework of our New Generation Telco strategy, it is natural that we reduce our exposure to MegaFon.”
Telia said that, as a consequence of the transaction, MegaFon will be re-classified from an associated company to a financial investment from the fourth quarter of 2017.
Telia has not said that it will stick at a 19.2% stake, but did say it won’t sell any further shares for 90 days. It is likely that the MegaFon holding will be gradually reduced over time.
Dennelind said: “Even after the sale, Telia Company will remain the second largest shareholder in the company and we will continue our constructive co-operation with the main owner, USM Group to create value for all shareholders.”
USM describes itself as “a diversified international company with significant interests across the metals and mining, telecoms, internet and media sectors”. It represents the holdings of Russian businessman Alisher Usmanov and partners.
In mid-September Telia sold a 7% stake in Turkcell for the equivalent of $514 million – Dennelind saying, as he has today, that the move reflects the company’s policy to focus on Scandinavia and the Baltic states.
But Telia formed its strategy of withdrawal from its Eurasian activities after the company became embroiled in corruption in Uzbekistan, which last month saw it fined $965 million by US, Dutch and Swedish authorities.
Following the fine, Swedish authorities arrested Dennelind’s predecessor as CEO, Lars Nyberg, and two former colleagues, the former president and general counsel of its Eurasian business unit.
