VEON announces the issuance of previously authorized shares representing approximately 4.99% of total share capital
- None.
- Immediate dilutive impact on existing shareholders due to the issuance of new shares.
Insights
The issuance of new shares by VEON Ltd. is a strategic move aimed at funding the company's equity incentive-based compensation plans. This action is indicative of VEON's commitment to align the interests of its employees and managers with those of its shareholders. By incentivizing key personnel, VEON is likely to enhance its human capital, which is crucial for driving innovation and competitiveness in the digital connectivity and online services sector.
However, the immediate dilution effect for existing shareholders cannot be overlooked. With the issuance of new shares representing approximately 4.99% of the total share capital, the ownership percentage of all current shareholders will decrease. For instance, the largest shareholder's stake has been diluted from 47.85% to 45.46%. This dilutive effect might be a point of concern for investors as it could potentially affect the value of their holdings in the short term. Nonetheless, if the equity incentive plans lead to improved company performance, this could result in long-term gains that offset the initial dilution.
The pricing of the new shares at USD 0.001, which is the nominal value of VEON's ordinary shares, is a standard practice for equity compensation issuances. This nominal pricing facilitates the allocation of shares to employees without significant cash outlay from them, making the incentives more accessible.
VEON's decision to allocate shares to equity incentive-based compensation plans is reflective of broader industry trends where digital operators are increasingly relying on equity-based compensation to attract and retain top talent. In a competitive market, such strategies can be pivotal for driving corporate growth and innovation, as they directly link compensation to the company's performance.
From a market perspective, the announcement of new share issuance could be received with mixed reactions. On one hand, it signals to the market that VEON is investing in its workforce, which may be interpreted as a positive indicator of its future prospects. On the other hand, the dilution of existing shares might raise concerns among investors about potential earnings per share (EPS) reduction, at least in the short term.
It is also important to consider how this issuance aligns with VEON's overall financial strategy and whether it is sustainable in the context of the company's growth trajectory and capital structure. The effectiveness of these incentive plans in achieving long-term growth and performance targets will be a critical factor in assessing the success of this strategic move.
VEON's issuance of shares for equity incentive plans raises points of consideration in the realm of corporate governance. The alignment of senior management and employee interests with those of shareholders through equity incentives is a common governance practice intended to foster a shared focus on company performance and value creation.
However, it is essential to scrutinize the governance implications of such a significant dilution event. Shareholders must consider the balance between the potential benefits of incentivized management and the immediate dilutive impact on their equity. The company's governance structures should ensure that these plans are implemented with transparency and with a view to maximizing long-term shareholder value.
The reduction in the largest shareholder's ownership percentage also has governance implications. Although LetterOne's holdings have decreased, they remain a substantial portion of the total shares, which could influence control dynamics within the company. Shareholders should monitor how these changes affect voting power and the potential for shifts in strategic direction.
VEON announces the issuance of previously authorized shares representing approximately
Amsterdam, 1 March 2024 15:00 CET – VEON Ltd. (NASDAQ: VEON, Euronext Amsterdam: VEON), a global digital operator that provides converged connectivity and online services, today announces that its Board of Directors has approved the issuance of 92,459,532 of its authorized but unissued ordinary shares to fund its existing and future equity incentive-based compensation plans. As a result of the issuance, VEON will have 1,849,190,667 issued and outstanding ordinary shares.
The issuance of the ordinary shares in accordance with bye-law 3.1 of the VEON bye-laws represents approximately
The ordinary shares will be issued at a price of USD 0.001 per share, which is equal to the nominal value of VEON's ordinary shares.
Kaan Terzioglu, VEON's CEO, commented: "We are pleased to announce the issuance of shares to fund our equity incentive-based compensation plans, which reflect our commitment to creating value for our shareholders and rewarding our talented and dedicated team. We believe that these plans will enhance our ability to attract, retain and motivate our leaders and key contributors, who are driving our transformation into a digital operator and delivering on our vision of empowering customer ambitions.”
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
Important Notice
Elements of this press release contain or may contain “inside information” as defined under the Market Abuse Regulation (EU) No. 596/2014.
This release does not contain or constitute an offer or sale or the solicitation of an offer to purchase securities in the United States. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933 (the "Securities Act"), and may not be offered or sold in the United States absent registration under the Securities Act or an available exemption from, or transaction not subject to, the registration requirements of the Securities Act.
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 governance, strategy and investment plans. 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. Furthermore, elements of this press release contain or may contain, “inside information” as defined under the Market Abuse Regulation (EU) No. 596/2014.
Contact Information:
VEON
Hande Asik
Group Director of Communication
pr@veon.com
1 Based on the shareholdings reported on Schedule 13D, Amendment No. 20, filed on September 13, 2019, by L1T VIP Holdings S.à r.l. (“LetterOne”), LetterOne Core Investments S.à r.l. and LetterOne Investment Holdings S.A., with the SEC.
FAQ
How many ordinary shares will VEON issue for equity incentive-based compensation plans?
What is the percentage of total share capital represented by the newly issued shares?
Who is VEON's largest shareholder and how much ownership percentage did they have before the share issuance?
What is the price per share at which the ordinary shares will be issued?
What is the purpose of issuing the new shares according to VEON's CEO?
How will the issuance of new shares impact existing shareholders?
