VEON Announces Intention to Delist from Euronext Amsterdam and to Initiate a Share Buyback Program for up to USD 100 million

Rhea-AI Summary

VEON (NASDAQ, Euronext Amsterdam: VEON), a global digital operator, has announced its intention to voluntarily delist from Euronext Amsterdam in the fourth quarter of 2024. This move aims to simplify and streamline the company's reporting requirements, resulting in a sole listing on Nasdaq. Following the delisting, VEON plans to initiate a buyback program for up to USD 100 million of its American Depositary Shares (ADS).

The company believes that its ADSs are currently undervalued relative to its operations, presenting an opportunity for share repurchases. The timing and specifics of the ADS buybacks will be determined by VEON's management and Board of Directors, considering factors such as liquidity, market conditions, and legal requirements.

Positive

• Simplification of reporting requirements through sole listing on Nasdaq
• Initiation of a USD 100 million share buyback program
• Potential increase in shareholder value through ADS repurchases
• Management's confidence in the company's undervalued stock price

Negative

• Potential reduction in European investor exposure due to Euronext Amsterdam delisting
• Possible short-term stock price volatility during the transition period

Insights

Financial Analyst

VEON's decision to delist from Euronext Amsterdam and initiate a $100 million share buyback program is a significant strategic move that warrants attention. The delisting, expected in Q4 2024, aims to streamline reporting requirements and aligns with VEON's focus on technology, given Nasdaq's prominence in this sector. This could potentially enhance the company's appeal to tech-focused investors.

The planned $100 million share buyback program is particularly noteworthy. With VEON believing its ADSs are undervalued, this move signals management's confidence in the company's intrinsic value and future prospects. Buybacks can be positive for shareholders, potentially boosting earnings per share and stock price. However, it's important to consider the opportunity cost - whether this capital could be better utilized for growth initiatives or debt reduction.

Investors should closely monitor VEON's financial health and growth trajectory to assess whether this capital allocation decision is indeed optimal. The success of this strategy will largely depend on VEON's ability to deliver strong operational performance and capitalize on growth opportunities in its digital operator business model.

Market Research Analyst

VEON's strategic decisions reflect broader trends in the global telecom and technology sectors. The move to consolidate listing on Nasdaq aligns with the company's positioning as a "global digital operator," potentially enhancing its visibility among tech-savvy investors and analysts who closely follow Nasdaq-listed companies.

The timing of this announcement is intriguing, coming amidst a period of significant digital transformation in emerging markets, where VEON has a strong presence. This could be interpreted as a signal of VEON's commitment to its digital strategy and confidence in its market position.

The planned share buyback program, while modest in size relative to VEON's market cap, could have implications for market sentiment. It may be seen as a vote of confidence from management, potentially supporting the stock price in the short term. However, the long-term impact will depend on VEON's ability to execute its digital strategy and deliver sustainable growth.

Investors should keep a close eye on VEON's performance metrics in its key markets, particularly in areas like digital financial services and mobile internet adoption, to gauge the company's progress in its digital transformation journey and the potential for future value creation.

Corporate Governance Expert

VEON's decision to delist from Euronext Amsterdam and consolidate its listing on Nasdaq represents a significant shift in its corporate structure and governance approach. This move aligns with a broader trend among multinational companies to simplify their listing structures and reduce administrative burdens.

The transition to a sole Nasdaq listing could potentially enhance VEON's corporate governance profile in several ways:

• Streamlined reporting: Compliance with a single regulatory framework may lead to more efficient and focused corporate governance practices.
• Increased transparency: Nasdaq's stringent listing requirements could drive further improvements in VEON's disclosure and governance standards.
• Shareholder engagement: A single listing may facilitate more effective communication with shareholders and potentially attract a more focused investor base.

The planned share buyback program raises interesting governance considerations. While it can be seen as a shareholder-friendly move, it's important for investors to scrutinize the decision-making process behind this capital allocation choice. The Board and management should clearly communicate how this aligns with VEON's long-term strategy and value creation plans.

Shareholders should pay close attention to VEON's future governance disclosures and any changes in board composition or executive compensation structures that may accompany this strategic shift. The success of this transition will largely depend on VEON's ability to maintain robust governance practices and effectively engage with its evolving shareholder base.

Amsterdam, 1 August 2024: VEON Ltd. (NASDAQ, Euronext Amsterdam: VEON), a global digital operator that provides converged connectivity and online services, (“VEON” or the “Company”), announces its intention to voluntarily delist from Euronext Amsterdam (the “Delisting”). VEON is also pleased to inform its shareholders and the investment community that it intends to initiate a buyback program for up to USD 100 million with respect to its American Depositary Shares (“ADS”) following the Delisting.

The Delisting and the resulting sole listing on Nasdaq, a leading global index for technology companies, will simplify and streamline the Company’s reporting requirements. VEON expects the Delisting process to take place in the fourth quarter of 2024, following and subject to the filing of its annual report on Form 20-F (the “20-F”). Further information about the process will be released following the filing of the 20-F, with a period of 30 to 40 days from the date of that announcement until the date of the Delisting.  

VEON anticipates that the Delisting will be in the best interests of the Company as a whole, including both its current and potential investors; and would like to thank its Euronext Amsterdam investors for their support. The Company will endeavour to ensure a smooth transition for its shareholders during the Delisting process.

Following the completion of its transition to sole listing on Nasdaq, VEON intends to initiate a buyback program for up to USD 100 million of its ADSs. The Company believes that its ADSs have been trading at a price which does not adequately reflect their value in relation to the Company's current operations; and that the purchase of ADSs for other corporate purposes represents an opportunity.  

The timing and specifics of the ADS buybacks will be determined by the Company's management and Board of Directors in due course, and will be subject to liquidity considerations, market conditions, applicable legal requirements, and other factors.

About VEON
VEON is a 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.  Headquartered in Amsterdam, VEON is listed on Nasdaq and Euronext. For more information visit: https://www.veon.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 timeline for publication of its annual report, the Delisting and its buyback program. 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. There can be no assurance that the initiatives referred to above will be successful.

Important information

This press release contains inside information within the meaning of Article 7(1) of the European Market Abuse Regulation (596/2014).

Contact information

Hande Asik
Group Director of Communication 
pr@veon.com

Faisal Ghori
Group Director of Investor Relations
ir@veon.com

FAQ

When will VEON delist from Euronext Amsterdam?

VEON expects to delist from Euronext Amsterdam in the fourth quarter of 2024, following the filing of its annual report on Form 20-F.

What is the size of VEON's planned share buyback program?

VEON intends to initiate a buyback program for up to USD 100 million of its American Depositary Shares (ADS) following the delisting from Euronext Amsterdam.

Why is VEON delisting from Euronext Amsterdam?

VEON is delisting to simplify and streamline its reporting requirements, resulting in a sole listing on Nasdaq, which is a leading global index for technology companies.

How will the delisting affect VEON shareholders?

VEON will ensure a smooth transition for its shareholders during the delisting process. The company believes the move is in the best interests of both current and potential investors.