Telia Company and Fintur Holdings – jointly owned by Telia and Turkcell – have agreed to sell their 75% combined stake in Kazakh mobile operator Kcell to state-backed incumbent telco Kazakhtelecom (KT) for USD446 million in a deal which is expected to complete this month. Separately, Telia has signed an agreement to acquire Turkcell’s share in Fintur to become Fintur’s sole shareholder.
Kcell’s divestment to KT – controlled by the Kazakh government via sovereign wealth fund Samruk-Kazyna – was approved by Kazakhstan’s anti-monopoly authority – the Committee on Regulation of Natural Monopolies & Protection of Competition (KREMZK) – back in July 2018, but negotiations were delayed as KT/Telia/Turkcell struggled to agree on price. The transaction sees Telia Company divest its directly-held 24% in Kcell to KT alongside the 51% stake held by Fintur (itself owned by Telia [58.55%] and Turkcell [41.45%]). The remainder (25%) of Kcell is distributed on the Kazakhstan and London Stock Exchanges.
KT has an existing presence in the Kazakh mobile sector via joint venture Tele2-Altel, in which it holds a majority equity stake but a minority voting share.
Sweden-based Telia’s agreement to acquire Turkcell of Turkey’s 41.45% Fintur stake is priced based on the two investors’ proportional share of the cash in Fintur. The total cash position in Fintur was approximately SEK6.1 billion (USD672 million) at the end of November which will be split proportionally whereby Telia Company pays 95% on the cash value to Turkcell. In total Telia keeps approximately SEK3.7 billion plus its proceeds from Kcell. The cash in Fintur will be distributed to Telia Company in full. Closing is expected in early 2019.
As a result of the Fintur transaction Telia Company will become sole shareholder of mobile operator Moldcell in Moldova (Telia’s last remaining former ‘Eurasia’ division unit), although the Moldovan company remains earmarked for sale.