TeliaSonera has announced that it has reached an agreement to sell back its indirect ownership in Nepalese regional telco Nepal Satellite Telecom (NST) to Zhodar Investment. In a press release yesterday, the Nordic giant said that in the past twelve months, ‘uncertainty regarding the regulatory and legal environment for consolidation and granting of licences in Nepal has increased’, leading to its decision not to pursue an acquisition of NST.
In April this year, TeleGeography’s CommsUpdate reported that TeliaSonera-controlled mobile operator Spice Nepal Private (Ncell) had distanced itself from press rumours linking it with a bid to acquire NST, although it did confirm that its majority shareholder was in talks with NST’s owners as part of a plan to consider potential consolidation opportunities – including TeliaSonera making some form of investment in NST. At the time no details were given of the status of negotiations, with both parties only confirming their willingness to observe employee rights and other contractual obligations as per local law.
However, yesterday’s announcement apparently draws a line under the matter, leaving TeliaSonera free to concentrate on Ncell, which in its opinion ‘reduces the business risk and complexity of TeliaSonera’s total involvement in Nepal’. The Nordic telco will report a loss in the region of SEK400 million (USD61.2 million) as a result of the sale, although it notes that as NST’s operations are limited, its consolidated financial statements will not be affected when the company ceases to be included in its financial results. TeliaSonera’s effective ownership of 57% in NST is the result of acquisitions made in 2011 and 2012. The purpose of the acquisition was to strengthen TeliaSonera’s operations in Nepal with a complementary brand. Norton Rose Fulbright, K&L Gates, and UBS have been the principal advisors in the transaction which is expected to close within a month.