TeliaSonera exits Nepal, Axiata enters

Deal finalized at Rs 140 billion

KATHMANDU, Dec 21: TeliaSonera has finally quit Nepal, divesting its direct ownership of 60.4 percent in Ncell to Axiata, one of the largest Asian telecommunications groups, at US $ 1.030 billion on a cash and debt free basis.

Axiata on Monday signed a conditional sale and purchase agreement with TeliaSonera UTA Holdings B.V. and SEA Telecom Investments B.V. via Visor, a Kazhak investment group, for the 100 percent acquisition of Reynolds Holdings Ltd. However, it has consolidated a 20 percent Shrestha ownership.

According to TeliaSonera, it will take another six months to complete the deal.

Salomon Bekele, senior advisor, CEO office of TeliaSonera, said that the total deal is worth US $ 1.4 billion (Rs 140 billion), of which TeliaSonera will get a total of US$ 1.1 billion approximately, including its US $ 1.03 billion and US $ 48 million from Bhavana Singh Shrestha for dissolving its (TeliaSonera's) economic interest in the 20 pct local ownership.

"All the transaction of TeliaSonera including 19.6 percent of stake of Visor will be sold to Axiata. As it is compulsory that 20 percent of the ownership of any company to be operated in Nepal is required to be held by a Nepali citizen, Niraj will be selling his 20 percent share to Sunivera Capital Ventures Pte Ltd, a Singapore registered company owned by Bhavana Singh Shrestha, which was chosen by Axiata itself," said Bekele.

With this, Teliasonera said that all arrangements between Niraj and TeliaSonera which were made in 2012 will lapse in conjunction.

TeliaSonera's CEO Johan Dennelind announced in September that they will be reducing their presence in seven Eurasian markets mainly because of investigations into alleged corruption linked to local partners and problems accessing cash in distant countries.

"To make a responsible exit is of utmost importance for us. We will continue our good cooperation with the Nepalese government in our engagement of rebuilding Nepal after the earthquake," said Dennelind in the statement.

"This is the first time we are selling our stake as we got a good deal and it's a win-win situation for all," said Bekele.

Shrestha's share gets lesser value

As part of the divestment of Ncell to Axiata, TeliaSonera will dissolve its economic interests in the 20 percent local ownership and will receive approximately US $ 48 million from Sunivera Capital Ventures Pte Ltd. Niraj Govinda Shrestha will sell his locally held shares to Bhavana Singh Shrestha.

Niraj holds 20 percent share worth US $ 230 million as a loan which was financed by TeliaSonera against share pledges.

According to Bekele, TeliaSonera agreed on US $ 48 million as compensation for releasing economic interest of Rs 230 million against its 20 percent share pledge as they did not see any opportunity of receiving more than US $ 48 million.

Bekele however agreed that they have made different share valuations for local as well as international shares.

Asked if a local company here was ready to pay more than US $ 48 million, Bekele said that all the buyers and sellers are happy. "As we as well as Axiata are satisfied we signed the deal today morning," said Bekele.

TeliaSonera said that transaction between local partners will be onshore and it's taxable while the offshore international transaction is non-taxable. "We have had legal advice to make sure that taxes are paid according to the rules and regulations," said Bekele.