8-K: VEON's Kyivstar to List on Nasdaq Through Business Combination with Cohen Circle Acquisition Corp. I

Kyivstar, Ukraine's largest digital operator, is set to list on Nasdaq through a business combination with Cohen Circle Acquisition Corp. I, offering a unique U.S.-listed pure play Ukrainian investment opportunity.

Summary

• VEON and Cohen Circle Acquisition Corp. I have signed a business combination agreement to list Kyivstar, a leading Ukrainian digital operator, on Nasdaq under the ticker symbol 'KYIV'.
• VEON will retain a minimum of 80% ownership of Kyivstar Group following the completion of the business combination, expected in Q3 2025.
• The transaction assigns a pro-forma valuation of USD 2.21 billion to Kyivstar at closing.
• Kyivstar serves 24 million customers with fixed and mobile communication services and has a strong consumer digital service portfolio, including healthcare platform Helsi and streaming platform Kyivstar TV.
• The company's enterprise services include cloud, cybersecurity, AI solutions, and the software development business Kyivstar Tech.
• Kyivstar has a resilient financial profile with $515M Adjusted EBITDA and a 56% Adjusted EBITDA margin in 2024.
• The company plans to invest USD 1 billion in new telecom technologies in Ukraine over 2023-2027.
• The transaction is subject to Cohen Circle's shareholder approval and other customary closing conditions.

Sentiment

Score: 8

Explanation: The document presents a positive outlook for Kyivstar's future, highlighting its strong market position, resilient financial profile, and growth potential. The management commentary is optimistic, and the transaction is expected to create value for investors.

Positives

• Kyivstar is a leading digital operator in Ukraine with a strong market position.
• The company has a resilient financial profile with high profitability.
• There is significant growth potential through digital services expansion and international partnerships.
• VEON is committed to investing USD 1 billion in Ukraine's telecom technologies.
• The listing provides a unique U.S.-listed pure play Ukrainian investment opportunity.

Negatives

• The transaction is subject to shareholder approval and customary closing conditions, which could delay or prevent completion.
• The company's performance has been impacted by the war in Ukraine and a recent cyberattack.
• The company faces risks related to the war, competition, regulation, and economic conditions.

Risks

• The ongoing war in Ukraine poses significant risks to Kyivstar's network infrastructure, operations, and financial performance.
• The company faces competition in the telecommunications market.
• Regulatory and legal uncertainties could impact Kyivstar's business.
• The company is exposed to cyberattacks and data privacy risks.
• Fluctuations in foreign currency exchange rates could affect Kyivstar's financial results.

Future Outlook

Kyivstar is poised for growth with the Ukrainian recovery and expansion of digital services. The company plans to invest USD 1 billion in new telecom technologies in Ukraine over 2023-2027.

Management Comments

• Augie K Fabela II, Chairman and Founder of VEON, stated that Kyivstar's listing on Nasdaq will mark a defining moment for Ukraine's economic future.
• Kaan Terzioglu, VEON Group CEO, believes that Kyivstar's strong financial profile, visionary strategy, and robust governance structure will be appealing to international investors.
• Oleksandr Komarov, CEO of Kyivstar, looks forward to completing the Business Combination with Cohen Circle to embark on the next phase of Kyivstar's growth.
• Betsy Cohen, Chairman and CEO of Cohen Circle Acquisition Corp. I, stated that Kyivstar is an inspiring business and a significant investment opportunity.

Industry Context

This announcement comes as the telecommunications industry is increasingly focused on digital services and infrastructure development. Kyivstar's expansion into digital services and its commitment to investing in Ukraine's telecom technologies align with these trends.

Comparison to Industry Standards

• Kyivstar's 2024 Adjusted EBITDA margin of 56% is competitive with global peers, such as Elisa (53%) and Ooredoo (47.6%).
• The proposed transaction values Kyivstar at 3.6x EV/2024P Underlying Adj. EBITDA, which is a discount to the median EV/EBITDA multiples of European (6.6x) and APAC (6.1x) peers.
• Kyivstar's monthly ARPU of US$ 3.0 is lower than the average of Central and Eastern European countries (US$ 10.7), indicating potential for growth.

Stakeholder Impact

• Shareholders of Cohen Circle will have the opportunity to invest in a leading Ukrainian digital operator.
• VEON will retain a significant ownership stake in Kyivstar Group and benefit from its growth.
• Kyivstar will gain access to the U.S. capital markets and attract international investors.
• The transaction will support the development of Ukraine's digital infrastructure and economy.

Next Steps

• Cohen Circle will hold a special meeting for its shareholders to approve the business combination.
• Kyivstar Group will file a registration statement with the SEC.
• The parties will work to satisfy the closing conditions and complete the transaction in Q3 2025.

Key Dates