VEON and Engro Corporation Advance to Closing Pioneering Infrastructure Partnership in Pakistan Following Regulatory Approvals

Rhea-AI Summary

VEON (NASDAQ: VEON) has secured all regulatory approvals for its strategic infrastructure partnership with Engro Corporation in Pakistan. The deal involves transferring VEON's infrastructure assets from Deodar to Engro Connect, Engro Corp's subsidiary. Under the agreement, Engro will pay $188 million to Jazz and guarantee Deodar's intercompany debt repayment of $375 million.

The partnership, initially announced in December 2024, received approvals from the Competition Commission of Pakistan, Pakistan Telecommunication Authority, and Islamabad High Court. The arrangement is expected to complete in June 2025. Jazz will continue to lease Deodar's infrastructure for nationwide mobile services through a long-term partnership agreement, transforming into an asset-light services company.

Positive

• None.

Negative

• Transfer of infrastructure assets reduces VEON's direct control over network infrastructure
• Long-term lease dependency on Engro for infrastructure services

Insights

Financial Analyst

VEON's $563M infrastructure deal with Engro transforms Jazz into an asset-light operator while unlocking significant cash and reducing debt.

This transaction marks a significant milestone in VEON's strategy to transform its Pakistan operator Jazz into an asset-light service company. The deal structure is twofold: Engro will pay approximately $188 million directly to Jazz and will guarantee the repayment of $375 million in intercompany debt, creating a total transaction value of $563 million.

The mechanics involve VEON's infrastructure assets under Deodar (Private) Limited being transferred to Engro Connect through a scheme of arrangement. Jazz will then lease back this infrastructure through a long-term partnership agreement, maintaining service continuity while freeing up capital.

This deal provides several strategic advantages for VEON. First, it significantly improves the company's balance sheet by generating immediate cash and transferring debt obligations. Second, it transitions Jazz to an asset-light model, reducing capital expenditure requirements and potentially improving return on invested capital. Third, it allows management to focus on digital services rather than infrastructure maintenance.

For investors, this represents a clear execution of VEON's stated strategy to separate infrastructure from services operations. Similar infrastructure monetization strategies have been successfully implemented by telecom operators globally to unlock shareholder value. The transaction's completion, expected in June, should positively impact VEON's financial flexibility in a challenging frontier market while maintaining operational capabilities through the leaseback arrangement.

Islamabad and Dubai, May 23, 2025: VEON Ltd. (Nasdaq: VEON), a global digital operator (“VEON” or “the Company”), announces that it has now secured all regulatory approvals for its strategic partnership with Engro Corporation Limited (“Engro Corp”) for the pooling and management of telecommunications infrastructure assets in Pakistan. The partnership, initially announced on December 5, 2024, is expected to enhance the efficiency of infrastructure and digital investments in the country, in line with Pakistan’s digital ambitions.

Under the agreement, VEON’s infrastructure assets housed under Deodar (Private) Limited, wholly owned by VEON through its subsidiary Pakistan Mobile Communications Limited, will vest into Engro Connect, an Engro Corp’s subsidiary, via a scheme of arrangement. The companies have secured the necessary regulatory approvals, including from the Competition Commission of Pakistan, the Pakistan Telecommunication Authority, and the Islamabad High Court. The scheme of arrangement and related settlements are expected to be completed in June.

"This landmark agreement will accelerate Jazz’s transformation into an asset-light services company, unlocking further growth potential for both Jazz and Engro Corp in their respective areas, and ultimately strengthening Pakistan’s digital transformation. We are delighted to proceed in this collaboration with Engro Corp, which will set the standard in terms of how efficient infrastructure investments can drive digital growth in frontier markets,” said Kaan Terzioglu, VEON Group CEO and Chairman of Jazz Board.

“I am pleased to note that we are now progressing to closing our pioneering infrastructure partnership with Engro Corp. This marks a significant milestone in our ServiceCo transformation. We will continue delivering world-class digital solutions empowering millions of Pakistanis in an asset-light model, while collaborating with Engro Corp, a trusted leader, for the infrastructure layer,” said Aamir Ibrahim, Jazz CEO.

“Prosperity and progress increasingly rely on technology and connectivity – and with this milestone, Engro strengthens its role as an enabler of Pakistan’s progress. This investment reinforces telecom infrastructure as a key vertical for us and we are keen on expanding access, empowering communities, and future-proofing the infrastructure that will drive growth for generations to come. This is a special moment for all of us at Engro, as this is what we have always stood for: ENabling GROwth,” said the CEO of Engro Holdings, Mr. Abdul Samad Dawood.

As part of the arrangement, Engro will pay Jazz an amount of approximately USD 188 million and will guarantee the repayment of Deodar’s intercompany debt in the amount of USD 375 million. VEON’s digital operator Jazz will continue to lease Deodar’s extensive infrastructure for the provision of nationwide mobile voice and data services under a long-term partnership agreement. 

About VEON

VEON is a Nasdaq-listed digital operator that provides converged connectivity and digital services to nearly 160 million customers.  Operating across six countries that are home to more than 7% of the world’s population, VEON is transforming lives through technology-driven services that empower individuals and drive economic growth. For more information visit: www.veon.com.

About Jazz

Jazz is Pakistan’s leading digital operator with over 71.5 million cellular subscribers and 73 million MAUs of digital services as of Q4 2024. Jazz offers the most extensive portfolio of digital services in Pakistan, including JazzCash, the country’s leading fintech; Garaj, the largest onshore cloud and cybersecurity platform; and Tamasha, Pakistan’s largest homegrown OTT video streaming and entertainment platform.

About Engro Corporation Limited

Engro Corporation is a diversified Pakistani conglomerate that strives to solve pressing issues through its portfolio of businesses. It has developed businesses across the verticals of energy and related infrastructure, petrochemicals, food and agriculture, telecommunication infrastructure, and international trading, over a period of 50+ years. Many of these pioneering businesses have been established in collaboration with global partners including IFC, Royal Vopak, Royal FrieslandCampina, CMEC and others. To learn more about Engro Corporation, please visit www.engrocorporation.com.

Disclaimer

This release contains “forward-looking statements”, as the phrase is defined in Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Forward-looking statements are not historical facts, and include statements relating to, among other things, VEON’s investment plans, digital products, business plans and commercial partnerships. Forward-looking statements are inherently subject to risks and uncertainties, many of which VEON cannot predict with accuracy and some of which VEON might not even anticipate. The forward-looking statements contained in this release speak only as of the date of this release. VEON does not undertake to publicly update, except as required by U.S. federal securities laws, any forward-looking statement to reflect events or circumstances after such dates or to reflect the occurrence of unanticipated events.

VEON
Hande Asik
Group Director of Communications
pr@veon.com

ENGRO CORPORATION
Aman Haque
Vice-President, Corporate Communication
corpcomms@engro.com

FAQ

What is the value of VEON's infrastructure deal with Engro Corporation?

Engro will pay $188 million to Jazz and guarantee the repayment of Deodar's intercompany debt of $375 million.

When will VEON's infrastructure partnership with Engro be completed?

The scheme of arrangement and related settlements are expected to be completed in June 2025.

What regulatory approvals did VEON receive for the Engro partnership?

VEON received approvals from the Competition Commission of Pakistan, Pakistan Telecommunication Authority, and the Islamabad High Court.

How will the Engro partnership affect VEON's operations in Pakistan?

VEON's subsidiary Jazz will transform into an asset-light services company, continuing to lease infrastructure from Engro for nationwide mobile services through a long-term partnership agreement.

What assets are being transferred in the VEON-Engro deal?

VEON's infrastructure assets housed under Deodar (Private) Limited will be transferred to Engro Connect, a subsidiary of Engro Corporation.