WASHINGTON DC/Odesa, Ukraine (CI Ukraine)– Mike Pompeo – former Secretary of State and CIA director under President Donald Trump – effectively pulled the trigger for the largest foreign direct investment in Ukraine with the takeover of VEON, the $2.1 billion Nasdaq-listed parent of Ukraine’s largest mobile phone operator, Kyivstar.
[Former US Secretary of State and VEON independent board member Mike Pompeo speaks to Capitol Intelligence/CI Ukraine using Glass on a friendly takeover bid for Nasdaq listed VEON [Nasdaq:VEON] Kyivstar and that sanctioned Russian oligarch Mikhail Fridman has no influence over the company ahead of speaking at the Hudson Institute in Washington, DC on September 17, 2024]
Speaking as VEON’s independent board member, Pompeo told this news service that he would welcome a takeover offer for the company by the likes of US private equity giants Blackstone, KKR and Carlyle and that VEON’s former controlling shareholder, sanctioned Russian oligarch Mikhail Fridman, “is completely out” of VEON.
The takeover of VEON would follow the foot steps Xavier Neil, the billionaire founder of France’s Iliad telco group, to acquire Ukraine’s third-largest mobile phone operator and data provider Datagroup-Volia of which $435 million underwritten by the World Bank’s International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD). An official deal signing took place in Paris on October 9, 2024 hosted by French Foreign Minister Jean-Noel Barrot.
Former Serbian deputy prime minister and finance minister Bozidar Delic acted as financial advisor for Lifecell owners in his current role of investment banker for Lazard in Paris. The EBRD said the transaction represents the largest foreign direct investment in Ukraine to date.
Fridman, who controlled 45 percent of VEON through his London-based LetterOne holding company, was forced to remove himself from the LetterOne board and that all his assets in the company are frozen following UK sanctions triggered by Russia’s unprovoked invasion of Ukraine on February 24, 2022.
Sir Brandon Lewis — a former UK Lord Chancellor — was appointed to the VEON board to represent LetterOne in a move to assuage UK government concerns that Fridman can neither influence nor benefit from VEON, an investment banker working with VEON said.
Fridman, once the most feared and ruthless of the oligarchs, became a subject of scorn and ridicule in the UK for having to beg for an allowance to pay servants and maintain his $100 million mansion in London.
[Fiat Chrysler Automobile Chairman John Elkann speaks with Capitol Intelligence using CI Glass at Milan’s Malpensa airport. June 3, 2014]
Another VEO shareholder who welcomes a friendly offer for VEON is John Elkann, the Italian American heir to the Agnelli industrial dynasty of Stellantis (Fiat-Chrysler-Peugeot), Ferrari and Case New Holland (CNH).
Elkann, whose Amsterdam-based Exor financial holdings holds a 7.2 pct stake in VEON, is interested in joining a friendly takeover of VEON by the likes of a Blackstone/KKR/Carlyle, sources close to Elkann said.
Elkann doubled up his investment in VEON after Fridman assets were frozen, seeing a more than 60 percent gain in VEON’s share price.
It is understood the second largest shareholder in VEON, a Dutch trust (stichting) with 7.9 percent stake, is likely to have its voting rights suspended and any proceeds frozen until the US Securities and Exchange Commission and Dutch market regulators can determine whether Fridman has any beneficiary ownership in the Stichting.
KKR co-founder Henry Kravis will be interested in VEON after acquiring TIM (formerly Telecom Italia) fixed line domestic operations while Blackstone co-founder Stephen A. Schwarzman is pushing his PE fund to make Ukraine investments, such as their current talks talks with Kyiv, Ukraine-based Boosteroid Cloud Gaming , the world’s third largest video gaming cloud hosting concern.
In fact, a PE takeover of VEON is universally welcomed by the Ukrainian government of Volodymyr Zelensky, US Commerce Secretary Gina Raimondo, World Bank President Ajay Banga, the US International Development and Finance Corporation (US DFC) and the European Bank for Reconstruction and Development (EBRD).
Pompeo’s positive commitments for a full takeover has all but scuttled a plan by the Rothschild investment bank to spin-off VEON’s mobile towers operations. The spin-off had been widely seen a move that would benefit Fridman, who opposes the sale of VEON.
Mike Pompeo, in complete contrast to Trump VP pick US Senator JD Vance, is a staunch supporter for Ukraine.
In an editorial in the Wall Street Journal titled “A Trump Peace Plan for Ukraine“, Pompeo proposed that $500 billion of Russian frozen assets be immediately handed over to Ukraine so it can fund its war against Russia and begin the task of reconstructing the nation. Pompeo’s Op-ed mirrors a similar editorial published in the Asia Times on December 27, 2023.
Not only is Fridman’s removal from Kyivstar and the ability for Ukraine war victims to use Fridman for his ill-gotten billions a win-win but VEON become the new leader of mobile telephony in the developing world.
[Carlyle co-chairman and co-founder David Rubenstein speaks with Capitol Intelligence/CI Ukraine using CI Glass on how Carlyle and Blackstone of Stephen Schwarzman are leading private sector investment and support for Ukraine at the Library of Congress annual National Book Festival in Washington, DC on August 24, 2024]
Apart from Kyivstar, VEON is the leading mobile phone operator in Pakistan (Jazz), Bangladesh (banglalink), and Uzbekistan, Kazakhstan and Kyrgzstan (Beeline). Blackstone/KKR/Carlyle would be accquiring a well manged telecommunications company with an American chairman (Augie Fabela II) capable of takign other mobile phone operators such as the currently distressed African mobile phone operator, Africell.
By PK Semler in Washington, DC and Odesa, Ukraine. For more information, email pks@capitolintelgroup.com
Copyright of Capitol Intelligence Group – Turning Swords into Equity®