Norway’s telecom giant Telenor has entered into an agreement to sell 100 percent of its mobile business in Myanmar to M1 Group for NOK 900 million, the company recently announced.
Media E24 reports that the decision is due to the situation in the conflict-ridden country and about NOK 470 million of the deal will be paid over five years.
To E24, CEO Sigve Brekke says, “It is a very sad day, not only for Telenor now that we are leaving the country, but it is also sad to see what is going on in Myanmar.” The CEO says that Telenor has “considered many alternatives in recent weeks”, and that the process “has been ongoing until recently” before the agreement was entered into on 7 July.
Moreover, Sigve Brekke says that he does not have any figures on how much organizing the sale has cost but says that in terms of resources this has taken time for the company and Telenor has been monitoring the situation closely since 1 February both on the ground and at group level. “That’s how it is,” he says.
The agreement entails an estimated company value of approximately NOK 5.2 billion. M1 Group, an investment company based in Beirut, Lebanon, will take over all the shares in Telenor Myanmar and continue operating the company, it states.
“The new owner has been very impressed with what we have achieved in the country since 2014, they have seen how profitable it has been for us with early positive cash flow and significant dividends,” Sigve Brekke says.
According to Sigve Brekke, some conditions have been particularly challenging in Myanmar including employee safety, regulation conditions, and business practice. “ Everything became more challenging, and when we wrote down the investment (in May), we found a good balance between all three things. Since then, it has become more demanding, and it has led to the sale today,” he explains.
M1 group takes over the entire organization with its 730 employees and operations, and the new owner will deploy their team. Sigve Brekke does not want to speculate on the further development in conflict-ridden Myanmar, and points out that the situation “depends on the current authorities”.
“The agreement to sell Telenor Myanmar to M1 Group will ensure that operations continue. Telenor entered Myanmar with a belief that affordable mobile services would contribute to the country’s development and growth. I am grateful to all our employees and partners who have made a significant effort to build a company that has been a positive contributor to the people of Myanmar and provided top-class telecommunications services throughout Telenor’s presence in the country,” the CEO adds.
The transaction is subject to regulatory approvals in Myanmar.