VimpelCom Ltd., the Amsterdam-based parent company of local mobile operator Beeline, has sold its 90 percent stake in the company to the firm’s minority shareholder, Sotelco Ltd., which is owned by prominent Cambodian businessman Huot Vanthan, officials confirmed Sunday.
“We have previously outlined our Value Agenda within which our operations are reviewed to assess their future value to the Group. The decision to sell our interest in Cambodia is a result of this process. We are happy that our long term partner in the company now takes control of the business in Cambodia,” VimpelCom CEO Jo Lunder said in a statement on Saturday.
The sale came just weeks after VimpelCom’s annual filing with the U.S. Securities and Exchange Commission (SEC) stated that the company intended “to dispose of its entire indirect 90 percent stake in Sotelco Ltd.,” and were in negotiations with an unnamed potential buyer. Mobile operator executives have disclosed that Beeline and local firm qb have previously held talks about the possible sale of Beeline’s operations in Cambodia.
Mr. Vanthan originally sold a 90 percent stake in Sotelco Ltd. to Russian telecommunications investment firm Altimo in August 2007. Altimo then sold its stake to VimpelCom in July 2008 and VimpelCom launched in Cambodia under the Beeline brand the following year.
VimpelCom spokesman Bobby Leach declined to discuss details about the sale or release the selling price when contacted in Amsterdam. “I’m afraid the consideration will not be disclosed,” he said.
Mr. Leach said the company would continue to operate under the Beeline brand for another eight months. “After that, there is an option to continue should the owners wish to sign a brand licensing agreement,” he said.
Mr. Vanthan, who is chairman and CEO of the First Investment Specialized Bank and a partner of Maruhan Japan Bank PLC, could not be reached for comment. Mr. Vanthan is also the founder and owner of Huotraco Ltd., a local tobacco wholesaler.
According to figures from the Ministry of Posts and Telecommunications, Beeline is the fourth-largest mobile operator in the country in terms of the number of subscribers. However, the firm has struggled to stay afloat in the country’s over-saturated telecommunications market, which has undergone a number of mergers and acquisitions in recent years. The SEC filing dated March 22 states Beeline had only a 6 percent share of the Cambodian market in 2012. It also states that the firm had experienced a three-year trend of falling average revenue per user.
A fourth-quarter financial report released by VimpelCom earlier this year revealed that subscribers plummeted from 1.02 million to 598,000—the single largest drop since Beeline opened—during the last quarter of 2012. In March 2011, VimpelCom devalued its Vietnamese and Cambodian assets by $527 million, and a month later, also sold its Vietnamese operations.