From the initial public offering of the Kazakh wireless unit Kcell, TeliaSonera AB is set to receive $525 million. This is going to be the second share sale of the emerging market units of this Swedish Operator within a time frame of 2 weeks. A total of 50 million shares were sold, each priced at $10.50, thereby giving Kcell a total market value of $2.1 billion. These statistics were released by TeliaSonera officials today. The shares were offered within a range of $10.50 to $13 and the actual price was on the lower end of the range. The stock is expected to begin trading in London right from today itself.
The Chief Executive Officer of Kcell, Veysel Aral stated that they were hit by many factors such as tough competition and regulation in 2011; however, no further downsides are expected this year. TeliaSonera, incidentally, is the biggest phone company in Sweden and it is selling the stakes in its emerging market ventures, so that funds can be received. At the same time, the company doesn’t want to lose their holdings as the emerging market growth helps them more than the growth in the home market.
Incidentally, OAO MegaFon, another TeliaSonera holding completed an IPO worth $1.7 billion last month after the same was postponed in early 2012. Aral also added that more than $600 million worth dividends have been paid to TeliaSonera as the company decided to buy the remaining stake of 49% in Kcell for a deal worth $1.52 billion.
Kcell, incidentally, is the biggest mobile operator in Kazakhstan and has a subscriber base of more than 11.6 million. Kcell has revenue market share of 57% and the subscriber market share is 48%. There are three entrenched mobile operators in the country already and as all the frequencies have already been allotted, there is no chance of a new entrant. Kcell is currently trying to ensure that they don’t miss any chance of developing the frequency spectrum. Apart from Kcell, the other two mobile operators are Tele2 AB and VimpelCom Ltd.
Lars Nyberg, the CEO of TeliaSonera stated that the stakes of TeliaSonera in both Kcell and MegaFon will increase because of the two IPOs and will become a valuable strategic asset for the company. TeliaSonera shares declined by 0.7% today and is at 44.64 kronor currently.