TeliaSonera exits Nepal Satellite, to focus only on Ncell

TeliaSonera has sold its stakes at Nepal Satellite due to uncertainty regarding the regulatory and legal environment for consolidation and granting of telecom licences.

TeliaSonera has reached an agreement to sell back its indirect ownership in Nepal Satellite – a regional operator in Nepal – to Zhodar Investment, according to a press release of TeliaSonera.

Over the past year, uncertainty regarding the regulatory and legal environment for consolidation and granting of licences in Nepal has increased, it said, adding that pursuing an acquisition of Nepal Satellite is therefore not considered possible for regulatory reasons. “The agreement enables TeliaSonera to concentrate on Ncell, which reduces the business risk and complexity of TeliaSonera’s total involvement in Nepal.”

In connection with the sale, TeliaSonera has reported a loss of circa SEK 0.4 billion. Nepal Satellite’s operations are so limited that the consolidated financial statements will not be affected when the company ceases to be consolidated, it added.

TeliaSonera’s effective ownership of 57 per cent in Nepal Satellite is the result of acquisitions made in 2011 and 2012. Norton Rose Fulbright, K&L Gates, and UBS have been the principal advisors in the transaction which is expected to close within a month.

“The purpose of the acquisition was to strengthen TeliaSonera’s operations in Nepal with a complementary brand,” claimed TeliaSonera that provides network access and telecommunication services in the Nordic and Baltic countries, the emerging markets of Eurasia, including Russia and Turkey, and in Spain.

TeliaSonera is the majority owner of mobile operator Ncell, which is the country’s largest mobile operator, with around 10 million subscriptions, the company said, adding that sales in Ncell were SEK 2.7 billion in 2012.

The NASDAQ OMX Stockholm and NASDAQ OMX Helsinki listed telecom service provider aims to be number one or two in all its markets, providing the best customer experience, high quality networks and cost efficient operations.

TeliaSonera is also the leading European wholesale provider with a wholly-owned international carrier network. In 2012, net sales amounted to SEK 105 billion, EBITDA to SEK 36.1 billion and earnings per share to SEK 4.59.

TeliaSonera refutes allegations

TeliaSonera has refuted allegations related to the commercial relationship between Ncell and Nepal Satellite Telecom (NST).

"Recently, there have been a number of demonstrations targetting Ncell, falsely alleging it of a commercial relationship with NST, incorrectly ascribing to operational responsibility," the principal shareholder of Ncell said, adding that the allegations are totally unfounded and incorrect as a matter of law and fact.

"Ncell has not acquired NST and has no plans to do so nor does it intend to merge with or take over NST," it said, stressing that operational responsibility over NST’s activities lies with its own management and not with Ncell.

"TeliaSonera is in negotiations with shareholders of NST to evaluate consolidation opportunities pursuant to which a capital investment could be made by TeliaSonera in NST, enabling NST to provide faster and better service to its customers."

As is customary practice, while such negotiations are being conducted, confidentiality obligations are in place, which do not permit disclosure of the substance of these negotiations, but suffice it to say that if the current negotiations between TeliaSonera and NST are successfully concluded, both parties are committed to respecting employee and other contractual obligations in compliance to the law of the land, TeliaSonera added.

"Based on the facts, it is the earnest hope and desire of TeliaSonera and Ncell that the present demonstrations are halted immediately, as they are unfounded and disruptive and are impairing Ncell’s ability to continue providing uninterrupted quality telecommunication services to the people."