Teliasonera sees no value in split of Eurasia, Nordic units

BARCELONA Thu Nov 15, 2012 11:32pm IST

Stocks

   

BARCELONA (Reuters) - Splitting telecom operator TeliaSonera (TLSN.ST) into an emerging markets unit and a Nordic and Baltic firm would not benefit the company, Chief Executive Lars Nyberg said on Thursday.

TeliaSonera's emerging market strategy has come under intense scrutiny after Swedish prosecutors launched a preliminary probe into allegations of bribery and money laundering related to the company's purchase of a mobile licence in Uzbekistan in 2007.

Telia has denied wrongdoing, but some shareholders have suggested the company's operations in countries like Azerbaijan, Tajikistan and Kazakhstan should be split off, reducing risk in the rest of the business and allowing for tighter management focus.

"I see no benefit of splitting up the two businesses," CEO Lars Nyberg said on Thursday at the Morgan Stanley TMT conference. "I don't think too many investors would like to see the company's growth engine disappear."

Profits at Teliasonera's Eurasian unit have expanded 68 percent in the last four years compared to a 7.5 percent rise from Nordic and Baltic mobile, fixed line and broadband operations.

Illustrating the value of its emerging market unit, Telia got a 12.4 billion crown ($1.84 billion) payout in the second quarter after reducing its holding in Russia's number two mobile firm MegaFon.

A listing of a chunk of MegaFon shares should net Telia a further 9-11 billion Swedish crowns.

Telia's investment in the firm was 1.2 billion Swedish crowns.

Teliasonera is also likely to get some proceeds from the planned initial public offering of Kazakhstan's Kcell, in which it owns a 49 percent stake, which could take place by the end of the year.

In addition to money from the IPOs of MegaFon and Kcell, Telia is looking to sell its Spanish unit Yoigo and hopes to resolve a dispute over ownership of Turkcell (TCELL.IS), which has prevented it from reaping dividends from Turkey's biggest mobile operator.

Nyberg was nevertheless cautious about using the proceeds of such moves for extra dividends or buybacks for shareholders, though he said Telia had a history of paying out excess cash.

"The number one priority, absolutely, is to bring down leverage to 1.5 times (net debt to EBITDA) and maybe beyond," he said, adding leverage was currently at 2 times earnings before interest, tax amortization and depreciation.

"I want to see money in the bank first, then close to 1.5 times (EBITDA), then we can talk."

($1=6.7527 Swedish crowns)

(Reporting by Leila Abboud and Simon Johnson; Editing by Mike Nesbit)

Reforms Push

REUTERS SHOWCASE

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

26/11 Plotter

26/11 Plotter

Pakistan to challenge bail for Mumbai attack "mastermind".  Full Article 

Chinese Economy

Chinese Economy

China revises up size of 2013 economy, sees no effect on 2014 growth.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage