Norwegian telecoms company Telenor has agreed to sell its Myanmar business to Lebanon's M1 Group following the company's difficulties operating in the country in the wake of the military coup.
Telenor has decided to pull out of Myanmar following the February 1 coup that unseated Aung San Suu Kyi. Credit: Mino Surkala / Shutterstock
The $105 million (€88.6 million) payment will be deferred over five years. Telenor was one of the first western countries to offer business to the country following the end of its military dictatorship 10 years ago.
The February 1 coup, which lead to the overthrow of the democratically-elected Aung San Suu Kyi, was met with condemnation from the global community. The EU chose to suspend development funds as to not fund the current administration.
Read more: EU suspends development funds following Myanmar coup
Telenor is currently one of the largest foreign investors in the East Asian country. Myanmar alone accounted for 7% of the company's revenue last year.
Back in May, the group announced Telenor Myanmar's operations had been impaired by the political situation.
Telenor underlined at the time that the operations in Myanmar would continue and that the future presence would depend on the developments in the country and the ability to contribute positively to the people of Myanmar.
However, further deterioration of the situation and recent developments in Myanmar form the basis for the decision to divest the company owing to ordinary sales processes being impossible.
Sigve Brekke, the president and CEO of Telenor said: “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 in this situation.
"The agreement to sell to M1 Group will ensure continued operations. Telenor entered Myanmar because we believed that access to affordable mobile services would support the country’s development and growth.
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"I wish to thank all employees and partners who have taken significant efforts to build a company that has impacted the people of Myanmar and has provided state of the art telco services during Telenor’s years in the country."
Telenor started operating in Mynamar in 2014 and since then the group has invested more than NOK 5 billion (€5.09 billion) into its operations there.
Cashflow became positive in 2017 and the company Myanmar branch distributed approximately NOK 3.2 billion (€3.36 billion) in dividends.
The company lost a lot of revenue following the military junta, which ordered that mobile networks shut down to make it more difficult to pro-democracy activists to coordinate.
Uprisings have arisen since the coup. Nearly 300,000 people have been driven from their homes, and the UN claims over 5,000 have been detained.
This has placed Telenor in a precarious position.
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Brekke told Reuters there were three reasons why the company were withdrawing from Myanmar with the first and foremost being the safety of their employees.
"There are also the regulatory conditions and also that there is good compliance," he added.
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