Norwegian state-controlled telecoms operator Telenor has become the latest highest-profile company to exit Myanmar following the military coup in February, selling its business in the country to a Lebanese family investment group.
Norwegian state-controlled telecoms operator Telenor had already written off its entire $780m investment in Myanmar in May 2021.
The Norwegian group, which had been under growing pressure as the military junta in Myanmar restricted internet access amid a broader crackdown, said on Thursday that it had sold its local operations for $105m to M1 Group, an investment company founded by a former Lebanese prime minister and his brother.
“The situation in Myanmar has over the past months become increasingly challenging for Telenor for people security, regulatory and compliance reasons. We have evaluated all options and believe a sale of the company is the best possible solution,” said Telenor chief executive, Sigve Brekke.
Telenor, which was granted a licence in 2013 to operate in Myanmar, where it was seen as a cornerstone foreign investor, and its exit will be a blow to the military leaders’ efforts to maintain business confidence.
Japanese brewer Kirin and South Korean steelmaker Posco have both announced that they would exit joint ventures with Myanmar military-controlled conglomerates, but oil groups Chevron and Total remain investors in the main gasfield.
The Norwegian group had already written off its entire $780m investment in the country in May, but said then that it believed it could still “make a difference” in Myanmar.
Financial Times reported quoting Brekke that the dilemma for Telenor was “how can we operate in a country with military dictatorship without jeopardising our values?”
On Thursday, Brekke said, “It’s a sad day, no doubt about that. Both because it’s been a reasonably good investment. And even more than that, we have seen the way we have contributed to the development of the country.”
M1 has long been active in Myanmar and was a stakeholder in IGT, a big telecoms tower operator in the country, before it sold out to private equity firm CVC at the start of this year.
M1 was founded by brothers Taha and Najib Mikati. Najib was prime minister of Lebanon on two separate occasions.
The Mikati brothers, judged by Forbes to have fortunes of $2.7bn each, have based their success on telecoms businesses in Lebanon and throughout Africa.
M1 will pay Telenor $50m now and a $55m deferred payment over the next five years. Telenor, which invested NKr5.3bn ($604m) in Myanmar over seven years, and which took out NKr3.2bn in dividends more recently, said the deal implied an enterprise value of $600m due to debt and future liabilities.
Reuters reported this week that Myanmar’s military junta had told senior foreign telecoms executives not to leave the country without permission. Telenor declined to comment.
Telenor and other telecoms groups in Myanmar, which include Qatar’s Ooredoo and military-backed operators, had been forced to cut off mobile and internet services by the junta. The Norwegian group registered a “strong protest” against the crackdown and spoke out against a new cyber security law that will give the regime sweeping powers over digital content.
“The last two months all three areas [safety of employees, regulatory and compliance concerns] have worsened. We don’t see any improvements,” Brekke said, adding that it had been “important for Telenor to stand up for our values”.
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