OSLO, NORWAY: Telenor Group has entered into an agreement to sell 100 percent of its mobile operations in Myanmar to M1 Group for a total consideration of $105 million, of which $55 million is a deferred payment over five years.
The transaction corresponds to an implied enterprise value of approximately $600 million. M1 Group will acquire all the shares in Telenor Myanmar and continue the current operation.
On 4 May, Telenor Group announced an impairment of Telenor Myanmar. Telenor underlined at the time that the operations in Myanmar continued, and that the future presence would depend on the developments in the country and the ability to contribute positively to the people of Myanmar. Further deterioration of the situation and recent developments in Myanmar form the basis for the decision to divest the company. In the present situation it has not been possible for Telenor to conduct an ordinary sales process.
“The situation in Myanmar has over the past months become increasingly challenging for Telenor for people security, regulatory and compliance reasons. We have evaluated all options and believe a sale of the company is the best possible solution in this situation. The agreement to sell to M1 Group will ensure continued operations. Telenor entered Myanmar because we believed that access to affordable mobile services would support the country’s development and growth. I wish to thank all employees and partners who have taken significant efforts to build a company that has impacted the people of Myanmar and has provided state of the art telco services during Telenor’s years in the country”, says Sigve Brekke President and CEO of Telenor Group.
Since operations started in 2014, Telenor’s funding to Myanmar has been around 5.3 billion NOK. After turning cashflow positive in 2017, Telenor Myanmar has distributed approximately 3.2 billion NOK in dividend. With effect from second quarter of 2021, Telenor Myanmar will be treated as an asset held for sale and discontinued operations.
The gain/loss calculation arising from the transaction will be impacted, inter alia, by the accumulated translation differences related to the Myanmar operation and will be finally determined at closing. The transaction is subject to regulatory approvals in Myanmar.