The Norwegian telecom giant Telenor wrote in a stock exchange announcement on 25 March, that the sale of its Myanmar business has now been completed.
According to the announcement, Telenor has received $ 50 million (around NOK 450 million) in connection with the transaction. The remaining USD 55 million will be settled in five equal installments over the next five years.
Moreover, Telenor said, “The transaction involves only minor changes in Telenor Group’s equity. However, the sale will result in accumulated losses of around NOK 0.8 billion related to translation differences previously recognized as other income elements being reclassified to the income statement. The transaction entails a negative cash flow effect of around NOK 1.5 billion as the cash balance in Telenor Myanmar is only partially compensated by the sales consideration. The transaction will be booked in the first quarter. Due to the uncertain situation in Myanmar, Telenor will not post the deferred part of the payment in connection with the completion of the transaction.”
The sale takes place following the military coup in the country shortly after the new year last year. Telenor has previously explained that the background for the sale was that the military junta in Myanmar demands to be allowed to monitor mobile communications.
The buyer is Lebanese M1 Group. The authorities in Myanmar have set as a condition that M1 Group shall have a local partner as co-owner of Telenor Myanmar after the transaction between Telenor and M1 is terminated.