Telenor says sale of Myanmar unit gets final approval from junta

Telenor flag flutters subsequent to the corporate’s headquarters in Fornebu, Norway, June 1, 2017. REUTERS/Ints Kalnins

SINGAPORE, March 18 (Reuters) – Myanmar’s junta has given the ultimate approval for the sale of Norwegian telecommunications firm Telenor’s (TEL.OL) operations within the nation to an area firm and a Lebanese funding agency, the agency stated on Friday.

Telenor Chief Govt Sigve Brekke stated in an announcement the agency needed to depart the nation to “adhere to our personal values on human rights and accountable enterprise, and since native legal guidelines in Myanmar battle with European legal guidelines”.

“The safety scenario is excessive and deteriorating, and we should be sure that our exit doesn’t improve the security threat for workers,” he stated.

Reuters reported the approval earlier on Friday, citing three sources with information of the deal.

Based on a letter of approval despatched on March 15, seen by two of the folks, the switch of Telenor’s Myanmar unit to its new homeowners should occur inside 5 days.

Myanmar authorities didn’t instantly reply to phone and e mail requests for remark.

“The final yr has been an especially troublesome scenario, I believe it’s the most difficult Telenor has ever needed to deal with, much more for the folks dwelling on the bottom,” Brekke advised Reuters.

One among Telenor’s traders, pension fund KLP, which owns 1.43%, welcomed the approval of the sale.

“It’s satisfying to know that Telenor has lastly acquired an approval on the sale given the demanding circumstances,” Kiran Aziz, KLP’s head of accountable investments, advised Reuters.

“Till the approval it had been a balancing act for the corporate so as to keep impartial within the ongoing battle, (whereas) on the identical time (managing) the worker security threat and respecting human rights.”

A Norwegian opposition lawmaker stated the sale was a “horrible choice”.

“Those that combat for democracy will probably be put into extra hazard,” Ola Elvestuen, who had questioned the dealing with of the sale course of by the federal government in parliament, advised Reuters. The Norwegian state is almost all proprietor in Telenor. learn extra

Some civil rights teams have stated the deal may put the information of 18 million folks inside the junta’s attain, and known as on Telenor to delete private data of consumers.

Telenor has stated doing so would violate native legal guidelines and expose staff to hazard.

The Norwegian trade ministry stated Telenor had confronted “a number of dilemmas” in Myanmar.

LONG PROCESS

Telenor, one of many largest international traders in Myanmar, sought to depart the nation after final yr’s navy coup. The corporate advised Reuters in September it was promoting its operations to keep away from European Union sanctions after “continued stress” from the junta to activate intercept surveillance know-how.

Its departure from a rustic that accounted for 7% of its earnings in 2020 has been mired in issue.

Army leaders late final yr rejected its plan to promote its native operations to Lebanon’s M1 Group for $105 million, Reuters reported. As an alternative, they wished M1 to associate with an area agency, Shwe Byain Phyu.

Reuters reported in February that Shwe Byain Phyu, whose chairman has a historical past of enterprise ties to the navy, will personal 80% of the unit whereas M1 will personal the remaining.

Telenor solely learnt “a few months in the past” who would turn into the brand new majority proprietor, Brekke advised Reuters. “We have now not been concerned in discussions as such.”

Shwe Byain Phyu has denied ties to the Myanmar military and beforehand stated it was “chosen by Telenor … as a result of it was probably the most unrelated to the navy”.

In its assertion, Telenor stated the settlement to promote the Myanmar unit was with M1 alone, however added that the “regulatory approval requires that M1 ensures an area majority proprietor after the closing of the transaction between Telenor and M1”.

The agency stated on Friday that M1 had knowledgeable Telenor that its native associate, Shwe Byain Phyu, can be the 80% proprietor after the transaction.

“Sanctions screening from exterior consultants has assured Telenor that Shwe Byain Phyu and its homeowners should not topic to any present worldwide sanctions,” Telenor stated.

“The explanation for sanctions is that there are shut ties between people and firms and the navy,” Brekke stated. “Realizing that the Shwe Group just isn’t on the sanctions checklist has been essential for us.”

M1 stated in an announcement that it had partnered with Shwe Byain Phyu Group to kind a three way partnership to take over possession of Telenor Myanmar known as Investcom PTE.

The corporate stated it might work with stakeholders to shut the transaction as “quickly as attainable”.

CEO Azmi T. Mikati stated within the assertion that, “M1 Group is dedicated to assist Investcom PTE in offering important communications companies and investing to develop the telecommunications infrastructure.”

Shwe Byain Phyu didn’t reply instantly to requests for remark by Reuters.

Reuters reported earlier in March that Telenor is planning to switch $100 million held by its Myanmar operations to the unit’s new consumers – an quantity roughly equal to how a lot it will likely be paid over 5 years, three folks with information of the deal’s phrases stated.

Senior international Telenor executives have been barred from leaving Myanmar whereas negotiations across the sale have been ongoing, a junta minister advised Reuters final yr.

Two of the sources stated a senior Telenor Norwegian international government had not too long ago acquired permission from authorities to fly out.

An organization spokesperson stated in an announcement that “one Norwegian worker has been allowed to depart after 10 months of being banned from leaving Myanmar”.

Reporting by Fanny Potkin, Poppy McPherson and Gwladys Fouche; Enhancing by Kenneth Maxwell, Jason Neely and Jan Harvey

Our Requirements: The Thomson Reuters Belief Rules.