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Veon at risk from Russia, Ukraine war

May 5, 2022

Veon is a Netherlands-based multinational telecoms service company. Officially domiciled in Bermuda, it was founded in 2009 and perhaps better known as VimpelCom. Its subsidiary companies include Beeline, Kyvistar, Jazz, Wind Telecom and Banglalink. It is listed on the Nasdaq and Euronext exchanges – but the conflict between Russia and Ukraine risks bringing the whole group down.

A trading update for the period to March 31st says that it anticipates reporting a “material impairment” with respect its assets in Ukraine and Russia. “However, the uncertainty over the current situation meant these charges were ‘not as of yet determinable’” the company added, specifying that its ability to obtain relevant data required to build a business plan also played a role.

Such charges would not have an impact on the group’s cash flow, it added. Some 65 per cent of Veon’s revenues come from Russia (52 per cent) and Ukraine 13 per cent).

In Russia its revenue and core earnings also grew in local currency but the exchange rates made it report a decline in dollar terms. Ukraine earnings grew in both cases.

The Veon formal filing says: “Our business, financial condition or results of operations or prospects could be materially adversely affected by any of these risks, causing the trading price of our securities to decline and you [the shareholders] to lose all or part of your investment.”

The share price on Nasdaq has already dropped from $1.72 at the start of 2022 to $0.66 at close of business on May 2nd.

Veon is not subject to sanctions but it has a major Russian shareholder (LetterOne) with 47.58 per cent control of the company.

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