Veon has confirmed that it has signed a letter of intent (LOI) to move ahead with plans to float its Ukrainian mobile subsidiary Kyivstar in the US.
The company noted today (January 13), that it signed the LOI with special purpose acquisition company (SPAC) Cohen Circle to combine their businesses, with the aim of indirectly listing Kyivstar on Nasdaq, where the parent company also has its sole listing after delisting from Amsterdam in 2024.
Veon is aiming to complete the listing by the end of the year, reported Reuters, which also noted that a SPAC was chosen by Veon as a simpler process rather than through a standard IPO.
If completed, Kyivstar would become the first Ukrainian firm to be listed in the US.
According to Veon, the opportunity to become listed in the US would enable the company to attract international investors to support the company's growth and push Ukraine's economy.
The move aims to prompt further investment in Ukraine's telecom industry, following NJJ Holding's (NJJ) acquisition of Lifecell and Datagroup-Volia in Ukraine from Turkish carrier Turkcell for $524.3 million last year. NJJ is the investment firm of telecom mogul Xavier Niel
Kyivstar is Ukraine's largest mobile network operator, serving close to 24 million customers.
“The agreement that we have reached with Cohen Circle is a significant step in Veon’s ambition of crystallizing value for our investors, including through the listings of our key assets where relevant," said Kaan Terzioğlu , Veon Group CEO.
"It also underscores our commitment to rebuilding Ukraine through investments. We are excited to see investor interest in Kyivstar’s growth story and the appreciation of Ukraine’s potential."
The company notably partnered recently with SpaceX subsidiary Starlink to provide direct-to-cell satellite connectivity in Ukraine, amid the country's ongoing war with Russia.
Last year Veon increased its investment in the carrier to $1 billion for the period between 2023 and 2027.
Since Russia invaded Ukraine in February 2022, Kyivstar has built 1,895 new LTE base stations and upgraded about 13,200 existing base stations to 4G.
The telco has added more than 4,100 residential areas to 4G coverage, noting that 95 percent of the population of territories controlled by Ukraine have access to 4G services on Kyivstar's network.
By the end of 2026, Kyivstar wants to cover 98 percent of the population with 4G coverage.
Shah Capital, an investor in Veon, urged the company last year to list Kyivstar on Nasdaq.
The investor, which has a seven percent stake in Veon, noted at the time that the company is performing well below its expectations.
The investor also said that Veon should introduce a $100 million buyback scheme, and list subsidiaries Jazz and JazzCash on the stock exchange market in Karachi, Pakistan, and Dubai.
Shah added that Veon's Ukrainian unit Kyivstar should be listed on the Nasdaq, a move it estimates could unfreeze ownership shares to unlock around $3 billion.
Veon, which operates in a number of countries including Ukraine, Bangladesh, and Pakistan, serves more than 160 million customers.