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Veon: New Opportunities Due To Company Reorganization

Jul. 13, 2017 2:02 PM ETVEON Ltd. (VEON)4 Comments
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  • Transition from telecommunication business to digital business.
  • Sale of assets of the retail chain "Euroset" in Russia.
  • Increase in dividend payments.

Veon (NASDAQ: NASDAQ:VEON) is a holding company that controls telecommunication assets in the CIS countries, Italy and in several countries in Asia and Africa. Veon used to operate under the Vimpelkom brand until February 2017, and its main business was telecommunications in Russia and the CIS. And the company's revenue, as well as its share in the cellular communications market, has been falling rapidly in recent years. Therefore, the company's price since the end of 2013 fell from $14 to $4 and is now at a historical minimum. It was interesting that the company did the rebranding and stated in its press release that it was changing its field of activity and starting to engage in digital business.

source: Morningstar.com

Company history and business description

The Russian company Vimpel-Communications (abbreviated VimpelCom) was founded in 1991 by a group of specialists working in the Radiotechnical Institute, headed by Dmitry Zimin. The co-founder of the company was American businessman Ogi Fabela. In August 1993, the company registered the trademark Bee Line, under which it began to provide mobile services. In 1996, VimpelCom listed on the New York Stock Exchange (NYSE); Later the company moved to NASDAQ.

source: РБК - новости в реальном времени

In 2010, as a result of the merger of VimpelCom with Ukrainian cellular operator Kyivstar, VimpelCom Ltd. was established In 2011, the company merged with Wind Telecom of Egyptian businessman Naguib Sawiris. As a result of the transaction, VimpelCom entered the markets of Europe, Asia, Africa and North America. I want to note that such active deals in M&A greatly increased the company's debt burden, which subsequently led to an aggressive sale of assets and the company's entry into a depression. During this period after the deal the company lost a huge share of the Russian telecommunications market


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