425: Kyivstar Group Files for Nasdaq Listing, Reports Robust Q1 2025 Growth Amid Ukraine Investment Drive

VEON's subsidiary, Kyivstar Group Ltd., has publicly filed its Form F-4 registration statement for a Nasdaq listing, positioning itself as the first U.S.-listed pure-play Ukrainian investment opportunity, while reporting strong first-quarter 2025 financial results.

Summary

• Kyivstar Group Ltd. (PubCo), a subsidiary of VEON Ltd., has filed a registration statement on Form F-4 with the SEC in connection with its planned listing on the Nasdaq Stock Market.
• The listing is a result of a business combination agreement with Cohen Circle Acquisition Corp. I, announced on March 18, 2025, and is expected to close in the third quarter of 2025.
• Upon closing, Kyivstar Group's common shares and warrants will trade on Nasdaq under the ticker symbols KYIV and KYIVW, aiming to be the sole pure-play Ukrainian investment opportunity on U.S. markets.
• For the first quarter ended March 31, 2025, Kyivstar Group reported total operating revenue of USD 255 million (UAH 10.6 billion), representing a 37.1% year-on-year increase in USD and 49.6% in local currency.
• Excluding the impact of a Q1 2024 customer appreciation program (estimated USD 46 million revenue reduction), local currency revenue growth was 20.1% year-on-year.
• Profit for the period reached USD 44 million (UAH 1.8 billion), up 22.2% year-on-year in USD and 33.7% in local currency, with a profit margin of 17.3%.
• Adjusted EBITDA for Q1 2025 was USD 140 million (UAH 5.8 billion), a 50.5% year-on-year increase in USD and 64.6% in local currency, achieving an Adjusted EBITDA margin of 54.9%.
• Excluding the customer appreciation program impact, local currency adjusted EBITDA growth was 10.2% year-on-year.
• The Multiplay customer base grew by 40.7% year-on-year to 6.1 million, representing 29.5% of one-month-active mobile customers.
• Total digital monthly active users across Kyivstar Group's applications (MyKyivstar, Kyivstar TV, Helsi) reached 10.3 million, up 32.9% from the previous year.
• Subsequent to quarter-end, Kyivstar completed the acquisition of Uklon, a leading Ukrainian ride-hailing and delivery platform, for approximately USD 155.2 million in April 2025.
• The company also increased its ownership stake in Helsi, Ukraine's largest digital health platform, from 69.99% to 97.99% in May 2025.
• Kyivstar Group maintains a strong balance sheet with USD 489 million in cash and cash equivalents as of Q1 2025, with no external debt.
• VEON and Kyivstar intend to invest USD 1 billion in Ukraine between 2023 and 2027, focusing on infrastructure, technology, and strategic acquisitions.

Sentiment

Score: 8

Explanation: The document conveys a highly positive outlook, emphasizing strong financial performance, strategic expansion into high-growth digital services, and a unique market position as the first pure-play Ukrainian investment opportunity on Nasdaq. The significantly discounted valuation relative to peers further enhances its appeal. While acknowledging the inherent geopolitical risks of operating in a war zone, the overall tone and factual data point to a resilient and forward-looking company.

Positives

• Strong revenue growth in Q1 2025, with total operating revenue up 37.1% year-on-year in USD and 49.6% in local currency, demonstrating resilience and market leadership.
• Robust profitability with Adjusted EBITDA increasing by 50.5% year-on-year in USD and 64.6% in local currency, achieving a high Adjusted EBITDA margin of 54.9%.
• Significant expansion in digital services, evidenced by a 40.7% year-on-year growth in Multiplay customers to 6.1 million and a 32.9% increase in total digital monthly active users to 10.3 million.
• Strategic acquisitions of Uklon (ride-hailing/delivery) for USD 155.2 million and an increased stake in Helsi (digital health) to 97.99% enhance Kyivstar's digital ecosystem and future growth potential.
• The planned Nasdaq listing positions Kyivstar Group as the first U.S.-listed pure-play Ukrainian investment opportunity, offering unique exposure to Ukraine's economic recovery and resilience.
• Commitment by VEON and Kyivstar to invest USD 1 billion in Ukraine from 2023-2027, signaling long-term confidence and support for the country's digital infrastructure.
• Maintained a strong balance sheet with USD 489 million in cash and cash equivalents and no external debt at Kyivstar as of Q1 2025.
• High employee engagement at 86% in 2024, surpassing pre-war levels, indicating a motivated and resilient workforce.
• Robust corporate governance practices, consistent with Nasdaq-listed VEON's standards, including established compliance and risk management frameworks.
• Attractive valuation relative to peers, with a proposed transaction EV / LTM Adj. EBITDA of 3.7x, significantly below the median of 7.1x for global peers and 6.5x for EMEA/APAC single-country peers.

Negatives

• The Q1 2024 financial results were negatively impacted by an estimated USD 46 million (UAH 1.7 billion) customer appreciation program following a cyber security incident in late 2023.
• The ongoing war in Ukraine has led to a loss of approximately 3.1 million subscribers since January 2022 due to migration, loss of territories, and technical subscriber base clean-up.
• Increased electricity prices and a worsened macroeconomic landscape with UAH devaluation and inflation continue to pose operational challenges and impact costs.
• The company's independent auditors included a going concern emphasis paragraph in their opinion due to the effects of the ongoing war in Ukraine.

Risks

• Network infrastructure, equipment, systems, and other assets are subject to disruption, damage, and failure as a result of the war in Ukraine.
• Operations may continue to experience disruptions and incur substantial additional operating costs due to the war.
• There is a risk of nationalization or confiscation of operations and assets in Ukraine.
• The independent auditors have included a going concern emphasis paragraph in their opinion due to the effects of the ongoing war in Ukraine.
• The company has suffered reputational harm as a result of the ongoing war in Ukraine.
• Changes in customer demand due to migration and population shifts may continue to occur.
• Operating in a highly competitive market may make it difficult to expand the customer base or retain existing customers.
• Investing in frontier markets like Ukraine is subject to greater political, legal, and economic risks.
• The company may be unable to keep pace with technological changes and evolving industry standards, harming its competitive position.
• Inability to secure necessary spectrum or licenses, and high acquisition and deployment costs for 5G, could adversely affect service quality and increase operating expenses.
• The telecommunications industry is highly capital intensive, requiring substantial and ongoing expenditures.
• The company may not be able to raise additional capital, or may only be able to do so at significantly increased costs.
• Indebtedness and debt service obligations could decrease cash flow, adversely affecting business and financial condition.
• The international economic environment, inflationary pressures, geopolitical developments, and unexpected global events could cause the business to decline.
• Exposure to cyber-attacks, including the 2023 cyber-attack, may lead to compromised services, data leaks, and loss of customer confidence.
• From time to time, the company may recognize substantial impairment charges.
• Equipment and systems are subject to disruption and failure, which could lead to customer loss, limit growth, violate licenses, or reduce confidence in data security.
• Exposure to foreign currency exchange loss, fluctuation, and translation risks, particularly due to the war in Ukraine.
• Revenue performance can be unpredictable as a large majority of customers do not have long-term fixed contracts.
• Strategic partnerships and relationships carry inherent business risks.
• Inability to contract with suppliers of telecommunications equipment due to sanctions or other restrictions on services to Ukraine.
• Dependence on senior management, board of directors, and highly skilled personnel; inability to retain or motivate key personnel could harm competitive position or business strategy.
• Core growth strategies of expanding digital offerings and investing in 4G connectivity may not be successful.
• The success of businesses depends on implementing strategic initiatives and integrating acquired businesses; expected benefits may not be realized if not successfully implemented.
• Dependence on third parties for certain services, equipment, infrastructure, and other products important to the business.
• Ability to profitably provide telecommunications services depends in part on interconnection agreements and access to third-party owned infrastructure and networks, over which there is no direct control.
• Loss of important intellectual property rights, as well as third-party claims of infringement, could significantly harm the business.
• Insurance coverage, customer indemnifications, or other liability protections may be unavailable or inadequate to cover all significant risks.
• The telecommunications industry is highly regulated, and operating in an uncertain judicial and regulatory environment may result in unanticipated outcomes.
• Violations of and changes to applicable sanctions and embargo laws, including export control restrictions, may harm the business.
• Subject to tax claims and repeated tax audits that could harm the business.
• Changes in tax treaties, laws, rules, or interpretations, including deferred tax asset recognition and recoverability, could harm the business.
• Changes in regulatory requirements in banking and other financial systems and currency control requirements in certain countries restrict activities.
• Laws restricting foreign investment could materially harm the business.
• New or proposed changes to laws or new interpretations of existing laws may harm the business.
• Inability to detect and prevent fraud or other misconduct by employees, joint venture partners, or third parties.
• Subject to anti-corruption laws.
• Collection and processing of sensitive personal data subjects the company to evolving data privacy laws and heightened regulatory obligations.
• Involvement in, association with, or subjection to legal liability in connection with disputes and litigation with regulators, competitors, and third parties.
• Licenses are granted for specific periods and may be suspended, revoked, or not extended/replaced upon expiration, and the company may be fined or penalized for alleged violations.
• It may not be possible to procure in a timely manner, or at all, the permissions and registrations required for base stations.
• The business may be adversely impacted by work stoppages and other labor matters, including mobilization.
• Adoption of new accounting standards and regulatory reviews could affect reported results and financial position.

Future Outlook

The company anticipates the closing of the business combination with Cohen Circle Acquisition Corp. I during the third quarter of 2025, which will lead to Kyivstar Group becoming the first U.S.-listed pure-play Ukrainian investment opportunity. Management expects continued growth in digital services and aims to leverage Ukraine's economic recovery. VEON and Kyivstar have a joint intention to invest USD 1 billion in Ukraine from 2023-2027, focusing on infrastructure and technological development, charitable donations, and strategic acquisitions. The company plans to continue growing its fixed broadband market share, maintain ARPU growth, and sustain its mobile market leadership.

Management Comments

• Kaan Terzioglu, CEO of VEON Group, stated: "This filing represents a milestone in VEONs plans to list Kyivstar Group on Nasdaq... which we believe presents U.S. and global investors with a compelling opportunity to invest in Ukraine and become a stakeholder in its economic growth and resilience through a robust Ukrainian company."
• Betsy Cohen, Chairman and CEO of Cohen Circle, commented: "Kyivstar Group has tremendous growth potential and continues to deliver strong operational and financial performance, reflecting the resilience of both the company and the country."
• Oleksandr Komarov, CEO of Kyivstar Group, remarked: "Our first quarter results reflect the strength of our digital operator strategy, delivering robust financial growth. In parallel, we continue to invest in strategic opportunities that drive Ukraines digital future, such as the acquisition of Uklon and increasing our stake in Helsi."

Industry Context

This announcement positions Kyivstar Group as a unique investment vehicle within the telecommunications and digital services industry, specifically targeting the Ukrainian market. The move to list on Nasdaq reflects a broader trend of companies seeking access to global capital markets and investor interest in emerging or frontier markets, particularly those with significant recovery potential. Kyivstar's strategy of expanding into digital services like ride-hailing (Uklon) and digital health (Helsi) aligns with the global industry trend of telecom operators diversifying beyond core connectivity to become 'digital operators,' leveraging their large customer bases for cross-selling and increased ARPU. The fragmented Ukrainian fixed broadband market also presents a clear consolidation opportunity, which Kyivstar is actively pursuing.

Comparison to Industry Standards

• Kyivstar's proposed transaction valuation of 3.7x EV / LTM Adj. EBITDA (Q1 2025) is significantly lower than the median of 7.1x for a global peer group of telecommunications companies, and 6.5x for EMEA/APAC single-country peers with leading market positions, suggesting a substantial discount.
• Kyivstar's Adjusted EBITDA margin of 54.9% in Q1 2025 (57% LTM) is robust and compares favorably to the average EBITDA margins of selected European peers (median 40.9%) and APAC peers (median 47.2%), indicating strong operational efficiency despite the challenging environment.
• Kyivstar's monthly ARPU of US$3.4 in Q1 2025 is considerably lower than the average of US$10.7 for Central and Eastern European countries, highlighting significant potential for ARPU growth as the Ukrainian economy recovers and mobile market matures.

Corporate Governance

Legal Proceedings

• The document mentions the risk of legal proceedings that may be instituted against Cohen Circle, Kyivstar, or VEON, or any of their subsidiaries, following the announcement of the Business Combination.
• It also states a general risk that the company is, and may in the future be, involved in, associated with, or otherwise subject to legal liability in connection with disputes and litigation with regulators, competitors, and third parties.

Related Party Transactions

• The core of the announcement is a business combination agreement between Cohen Circle Acquisition Corp. I and VEON Amsterdam B.V. (the Seller), VEON Holdings B.V., Kyivstar Group Ltd., and Varna Merger Sub Corp., indicating a significant transaction involving related entities.
• Financial statements list 'Loan receivable from VEON Amsterdam' and 'Receivable from VEON Amsterdam B.V.' as assets, indicating intercompany financial dealings.
• The 'Sources & uses' table for the transaction includes 'VEON rollover equity' of $1,972 million and 'Secondary proceeds to VEON' of $198 million, detailing the financial flows between the parent company and the new entity.

Stakeholder Impact

• Shareholders (VEON): Expected to benefit from the unlocking of value through the Nasdaq listing and will retain a significant 87.2% pro-forma ownership in the newly listed Kyivstar Group.
• Shareholders (Cohen Circle): Provided with a unique investment opportunity in a 'pure-play Ukrainian investment opportunity' with strong growth potential and a discounted valuation.
• New Investors: Offered a compelling opportunity to invest in Ukraine's economic growth and resilience through a robust, market-leading company.
• Employees: Benefit from a highly engaged and motivated workforce (86% engagement), with internal procedures in place to manage risks like personnel mobilization.
• Customers: Expected to benefit from continued investment in network quality, expansion of digital services, enhanced cybersecurity measures, and customer appreciation programs.
• Ukraine (Country): Receives a significant commitment of USD 1 billion in investment from VEON and Kyivstar (2023-2027) for infrastructure and technological development, contributing to economic recovery and digital ecosystem growth.

Next Steps

• The closing of the business combination with Cohen Circle Acquisition Corp. I is expected to occur during the third quarter of 2025.
• Obtain necessary shareholder approvals from Cohen Circle's shareholders for the business combination.
• The SEC needs to deem effective the Registration Statement on Form F-4 filed by PubCo.
• Kyivstar Group must meet the Nasdaq listing standards upon the closing of the business combination.
• Admission of PubCo for trading on Nasdaq under the ticker symbols KYIV and KYIVW.
• VEON and Kyivstar intend to continue investing USD 1 billion in Ukraine during 2023-2027, focusing on infrastructure and technological development.
• Successful integration of the recently acquired Uklon ride-hailing and delivery platform.
• Continued growth in digital services and increasing multiplay penetration among customers.
• Participation in future spectrum auctions to enhance service provision.
• Pursue fixed broadband market share growth through organic expansion and strategic acquisitions.
• Maintain consistent growth in Average Revenue Per User (ARPU) by continuing price leadership.
• Sustain mobile market leadership and grow the share of multiplay users.

Key Dates

Recommendation

Keywords

Kyivstar, VEON, Cohen Circle, Nasdaq Listing, Ukraine Investment, Telecommunications, Digital Operator, Mobile Services, Broadband, Uklon, Helsi, Q1 2025 Results, SEC Filing, Form F-4, Business Combination, SPAC, Digital Health, Ride-hailing