Toby Sterling and Supantha Maharjee

STOCKHOLM/AMSTERDAM – Veon’s chief executive stated that thousands of employees were working in bomb shelters in Ukraine to move equipment to the border to provide a digital safety net for refugees fleeing war.

In an exclusive interview, Veon CEO Kaanterzioglu stated that their efforts have helped around 85% of Veon’s Ukrainian telecom network to remain functional in Ukraine after Russia invaded on February 24th. However, there are still risks from both electricity shortages as well as the conflict.

Veon, a Dutch listed company, operates Ukraine’s largest cell phone provider. It is known as Kyivstar and has 4,000 employees. The market share for Ukraine is 25%.

Terzioglu from the Netherlands spoke on Zoom to discuss how his company deals with sanctions, war and financial worries.

Terzioglu offered a lens that allows one company to provide a telephone network for a diaspora growing rapidly.

Terzioglu explained that workers “practically work from shelters, and when they get the chance they head out into the field for maintenance,” Terzioglu added.

According to Terioglu, the reasons that parts of this network were not functioning was due to power loss and not being attacked by Russian forces. To get these components back online, workers had to operate gasoline-to-generators. Terioglu said that this was “one of our most logistically difficult jobs that we are doing.”

Moscow called the attack a “special operation” in order to demilitarize Russia. It has resulted in hundreds of deaths, reduced rubble levels and created a humanitarian emergency. Russia claims it did not target civilians in this country with 44 million inhabitants.

According to United Nations statistics, more than 3.2million people fled their homes and another 2 million were internally displaced.

Terzioglu calculated that there were 4 million refugees who had fled on the basis of data from cell phones, while 10 million people living in displacement.

Terzioglu was Veon’s group CEO, and he stated that Veon had opened up offices in refugee camps. He was also involved in the Syrian refugee crisis during his time as Turkcell CEO.

Veon was also supported by European, Chinese and American telecom companies. Operators such as Orange and Tele2 (NASDAQ:), have eliminated roaming and interconnection charges. However, equipment manufacturers such as Huawei (HK:), and ZTE (HK 🙂 are helping to maintain the network. This includes Ericsson (BS) and Nokia (NYSE), Microsoft Corp (NASDAQ:), Oracle Corp Terzioglu stated that (NYSE:) has made “heroic efforts” to maintain the network’s operation.

RUSSIAN CONNECTION

Veon is also the owner of the Russian’s second largest telecom network, Beeline. This market is its most lucrative. Veon is now faced with political pressures and sanctions on both sides.

Veon currently employs approximately 29,000 Russian employees. The company is taking steps to run its Russian and Ukraine business separately.

It has taken swift action to distance itself from Russian oligarch Mikhail Fridman. LetterOne, which is an investment vehicle, holds a 47.9% share in Veon and an 8.3% economic stake through the Dutch foundation.

Fridman received sanctions from the European Union, which he said would be fought.

Terzioglu stated that Fridman, who was resigned on February 28 from Veon’s board and LetterOne’s Board March 3rd respectively, now “has no economic interests in LetterOne.”

LetterOne did not respond to our request for comment. It stated that Fridman had had his assets frozen, and that he was stripped of all shareholder rights.

Terzioglu stated that he couldn’t speculate about whether the Russian government would sanction the company or make it national, however he hopes the Russian government will exempt the company from sanctions.

He said, “We will try our best to position this service as an essential service.”

Veon faces other financial concerns, including a drop in shares of 56% over the past year and a $5.4 billion U.S.-dollar denominated loan at the close 2021. Veon’s stock is trading at distress levels.

Fitch downgraded Fitch’s credit rating of the company to junk status on March 4th. Fitch said that Russia and Ukraine together accounted 62% for 2021 earnings prior to interest, taxes and depreciation (EBITDA), of $3.3 million.

Russian capital control and war made it impossible for the company to transfer funds between the two countries.

Investors have been reassured by several updates from the company, which has $2.1 billion of cash at the end February and $1.5 billion in the Netherlands.

Terzioglu said he was aware of reports https://www.bnnbloomberg.ca/veon-bondholders-enlist-advisors-ahead-of-planned-debt-talks-1.1739259 of a group of bondholders seeking talks and welcomed the opportunity to address them, though none have reached the company so far.

He said, “Having them organised gives us an opportunity to explain why we should not worry and how well-funded we are in terms of our obligations.”