TeliaSonera exits Nepal, Axiata enters

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 Niraj Govinda Shrestha as economic interest of loan against share pledges. "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 will hire legal advisors and pay the taxes according to the rules and regulations of Nepal in case of onshore transaction," said Bekele.

What next? It will take around six months to finalize all the transaction as they have to take four different approvals i.e. from the Department of Industry and Nepal Telecommunications Authority (NTA) in the case of Nepal, from shareholders in Axiata, as it is listed in the Malaysian Stock Exchange, and from Bank Negara Malaysia-- the central bank of Malaysia. "If anyone of the regulators fails to agree upon the deal, the whole process cannot move forward," said Bekele. Ncell's CEO Erim Taylanlar said that nothing will change in the priority of serving its customers. "We will continue to invest in the network and future of Nepal," he said. TeliaSonera however will not be allowing use of its logo once the transactions are settled and Axiata takes over. This is the second time the company has been re-branded. Earlier, in 2010 Mero Mobile owned by Spice Nepal was re-branded as Ncell after TeliaSonera came into the picture in 2008. However, TeliaSonera said that it has discussed with Axiata over their commitment, programs and policies on responsible business and corporate governance best practices. "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. Axiata currently has more than 260 million customers and 25,000 employees. Bekele said that Ncell will move according to TeliaSonera's plans and policies until Axiata takes over and then it's up to Axiata to deal with the existing employees and make its plans and policies for the future.