Facing extreme pressure from Myanmar’s Junta, Norwegian operator Telenor has sold it’s operations within the country to Lebanese investment firm M1 Group for $105 million, the company said in a statement on Thursday.
“Telenor Group has entered into an agreement to sell 100 percent of its mobile operations in Myanmar to M1 Group for a total consideration of $105 million, of which $55 million is a deferred payment over five years,” the operator’s statement read.
Telenor further highlighted that the transaction corresponds to an implied enterprise value of approximately $600 million. M1 Group will acquire all the shares in Telenor Myanmar and continue the current operation.
“Further deterioration of the situation and recent developments in Myanmar form the basis for the decision to divest the company,” Telenor said in a statement.
The Norwegian operator, and the telecoms sector, has been experiencing increased pressure on multiple fronts in the area, as it stands toe-to-toe with the country’s junta over its employees’ safety, while confronted with a draconian cybersecurity bill.
Earlier in May, Telenor recorded an impairment loss of $779.4 million by its Myanmar operations due to the country’s collapse from both security and human rights perspectives.
Following its military coup on February 1, the junta has repeatedly forced internet service providers to shut down or restrict access to the web since seizing power and imprisoning local leaders.
Previously, Reuters also reported that the junta has sent out letters to the heads of operators in Myanmar warning them that they are not allowed to exit the country without an approved permission.
In parallel, the army sent out a second letter notifying telcos that they must enable the use of interception technology allowing them to eavesdrop on calls, messages, web traffic, as well as tracking individuals.
“The situation in Myanmar has over the past months become increasingly challenging for Telenor for people security, regulatory and compliance reasons. We have evaluated all options and believe a sale of the company is the best possible solution in this situation. The agreement to sell to M1 Group will ensure continued operations,” Sigve Brekke President and CEO of Telenor Group said in a statement.
Brekke further stressed that Telenor had entered Myanmar because they believed that “access to affordable mobile services would support the country’s development and growth.”
Since operations started in 2014, Telenor’s funding to Myanmar has been around $602.35 million, and is considered one of the country’s biggest western investors.
After turning cashflow positive in 2017, Telenor Myanmar has distributed approximately $363.68 million in dividend.
With effect from second quarter of 2021, Telenor Myanmar will be treated as an asset held for sale and discontinued operations. “The gain/loss calculation arising from the transaction will be impacted, inter alia, by the accumulated translation differences related to the Myanmar operation and will be finally determined at closing. The transaction is subject to regulatory approvals in Myanmar,” the statement concluded.