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Telenor says the sale of Myanmar’s unit has received final approval from the junta

PHOTO FILE: Telenor flag waving near company headquarters in Fornebu, Norway, June 1, 2017. REUTERS / Ints Kalnins

March 18, 2022

Fanny Potkin and Poppy McPherson

SINGAPORE (Reuters) – Myanmar’s junta has given final approval for the sale of Norwegian telecommunications company Telenor’s operations to the country’s local company and Lebanese investment firm, the firm said on Friday.

Telenor CEO Sigwe Breke said in a statement that the firm was forced to leave the country to “adhere to our own values ​​in human rights and responsible business, and because local laws in Myanmar are contrary to European law.”

“The security situation is extraordinary and deteriorating, and we need to make sure that our exit does not increase the security risk for employees,” he said.

This was reported earlier on Friday by Reuters, citing three sources who know about the deal.

According to a letter of approval sent on March 15, which was seen by two people, the transfer of Telenor Myanmar to the new owners should take place within five days.

Myanmar authorities did not immediately respond to requests for comment by phone and e-mail.

“Last year was an extremely difficult situation, I think this is the most difficult situation Telenor has ever had, especially for people living on earth,” Breke told Reuters.

One of Telenor’s investors, the KLP pension fund, which owns 1.43%, welcomes the approval of the sale.

“It’s good to know that Telenor has finally been approved for sale due to difficult circumstances,” said Kieran Aziz, head of KLP’s responsible investment department, to Reuters.

“Prior to the approval, it was balancing for the company to remain neutral in the long-running conflict, (at the same time) managing the safety of employees and respecting human rights.”

LONG PROCESS

Telenor, one of Myanmar’s largest foreign investors, sought to leave the country after last year’s military coup. The company told Reuters in September that it was selling its activities to avoid European Union sanctions after “constant pressure” from the junta to activate interception surveillance technology.

His departure from the country, which accounted for 7% of its revenues in 2020, proved difficult.

Late last year, military leaders rejected a plan to sell their local companies to the Lebanese M1 Group for $ 105 million, according to Reuters. Instead, they wanted M1 to partner with local firm Shwe Byain Phyu.

In February, Reuters reported that Schwein Bein Fu, whose chairman has business ties to the military, would own 80% of the unit and M1 would own the rest.

Telenor learned only “a couple of months ago” who will become the new majority owner, Breke told Reuters. “We did not participate in the discussions as such.”

Shwe Bain Fu denies ties to Myanmar’s army and has previously said it was “chosen by Telenor … because it was most unrelated to the army.”

In a statement, Telenor said that the agreement to sell the Myanmar division was concluded only with M1, but added that “regulatory approval requires that M1 provide a local majority owner after the closing of the deal between Telenor and M1.”

On Friday, the firm said M1 had informed Telenor that its local partner, Shwe Biain Fu, would become the owner of 80% after the deal.

“The verification of sanctions by external consultants has assured Telenor that Shwe Byain Phyu and its owners are not subject to any international sanctions,” Telenor said.

“The reason for the sanctions is that there are close ties between individuals and companies and the military,” Breke said. “It was important for us to know that Shwe Group is not on the sanctions list.”

A statement from M1 said it had partnered with Shwe Byain Phyu Group to set up a joint venture to gain ownership of Telenor Myanmar called Investcom PTE.

The company said it would work with stakeholders to close the deal as soon as possible.

CEO Azmi T. Mikati said in a statement that “M1 Group is committed to supporting Investcom PTE in providing basic communications services and investing in telecommunications infrastructure development.”

Shwe Byain Phyu did not immediately respond to Reuters’ requests for comment.

Earlier in March, Reuters reported that Telenor plans to transfer $ 100 million stored in its Myanmar to new customers of the unit – an amount roughly equivalent to how much it will be paid in five years, said three people who know the terms of the deal.

Senior foreign executives at Telenor have been barred from leaving Myanmar pending talks on the sale, a junta minister told Reuters last year.

Two sources said that a high-ranking Norwegian foreign leader Telenor had recently received permission from the authorities to take off.

A company spokesman said in a statement that “one Norwegian employee was allowed to leave after a 10-month travel ban from Myanmar.”

Civil rights organizations said the deal could put the data of 18 million people within reach of the junta and called on Telenor to remove customers’ personal information.

Telenor said it would violate local laws and put employees at risk.

(Report by Fanny Potkin, Poppy McPherson and Gladys Fush; edited by Kenneth Maxwell, Jason Neely and Ian Harvey)



Telenor says the sale of Myanmar’s unit has received final approval from the junta

Source link Telenor says the sale of Myanmar’s unit has received final approval from the junta

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