F-1/A: Kyivstar Group Files F-1/A, Details Q3 2025 Performance Amid Nasdaq Listing

Kyivstar Group Ltd. filed an F-1/A registration statement for the resale of common shares by selling securityholders and the issuance of shares upon warrant exercise, while reporting Q3 2025 financial results and strategic updates.

Summary

• Kyivstar Group Ltd. is a telecommunications and digital business, operating as Ukraine's leading mobile communication provider by subscribers and broadband services by access lines as of December 31, 2024.
• The company provides mobile, digital, and fixed-line services to over 23 million mobile customers and over 1.1 million broadband subscribers as of December 31, 2024.
• For the nine months ended September 30, 2025, profit for the period was $34 million, significantly impacted by a one-time listing expense of $162 million.
• Adjusted EBITDA for the nine months ended September 30, 2025, was $477 million, with an Adjusted EBITDA Margin of 57%.
• Total operating revenues increased by 25.0% to $836 million for the nine months ended September 30, 2025, compared to $669 million for the same period in 2024.
• Mobile revenue increased by 17% to $722 million, fixed revenue by 14% to $40 million, and digital revenue by over 390% to $74 million for the nine months ended September 30, 2025.
• The increase in digital revenue was driven by the first-time consolidation of Uklon, enterprise solutions development, further penetration of Helsi, and growth of Kyivstar TV.
• The company consummated a business combination on August 14, 2025, leading to its listing on Nasdaq under the symbol KYIV, with VEON Amsterdam B.V. holding an 89.6% stake.
• The filing registers up to 6,768,098 common shares for resale by selling securityholders and 7,666,629 common shares issuable upon the exercise of outstanding public warrants.
• Kyivstar Group Ltd. expects to receive up to $88,166,233.50 from the exercise of warrants at an exercise price of $11.50 per common share, to be used for general corporate purposes.

Sentiment

Score: 6

Explanation: Kyivstar Group demonstrates strong operational resilience and strategic growth in a challenging environment, with significant revenue increases and robust Adjusted EBITDA. However, the ongoing war in Ukraine presents substantial risks, including potential nationalization, sanctions, and liquidity restrictions, which temper the overall positive sentiment. The one-time listing expense also negatively impacted reported profit.

Positives

• Maintained market leadership in Ukraine for mobile communication (over 23 million customers, 47% market share as of December 31, 2024) and fixed broadband (over 1.1 million subscribers, 14% market share as of December 31, 2024).
• Strong operational efficiency and continued profitability, with Adjusted EBITDA of $477 million and Adjusted EBITDA Margin of 57% for the nine months ended September 30, 2025.
• Significant revenue growth of 25.0% for the nine months ended September 30, 2025, driven by repricing, customer appreciation program ending, and strategic acquisitions.
• Successful diversification and expansion into digital services through acquisitions of Helsi (digital healthcare) and Uklon (ride-hailing and delivery platform), and growth of Kyivstar.Tech and Kyivstar TV.
• Continued investment in network infrastructure and resilience, including 2,617 new sites and 4,512 mobile settlements since 2022, and the launch of high-speed Gigabit Passive Optical Network (GPON).
• Strategic partnership with Starlink (SpaceX) to introduce direct-to-cell satellite connectivity in Ukraine, enhancing network resilience.
• Acquired 2x5 MHz spectrum in the 2100 MHz band and 40 MHz spectrum in the 2300 MHz band for UAH 1.43 billion ($34 million) in November 2024, strengthening spectrum holding.
• Consistent growth in multiplay users (6.1 million as of December 31, 2024, up 49% from 2023) and average monthly ARPU ($3.50 for 9M 2025, up from $2.90 for 9M 2024).
• High employee engagement rate of 86% in 2024, reflecting effective management and support during challenging times.
• Successful completion of the business combination and Nasdaq listing, providing a unique investment opportunity in the U.S. stock markets for a pure-play Ukrainian company.

Negatives

• Profit for the nine months ended September 30, 2025, decreased to $34 million from $190 million in the prior year, primarily due to a one-time, non-cash listing expense of $162 million.
• The ongoing war in Ukraine continues to cause disruptions, including customer migration (loss of up to 3.1 million subscribers from January 2022 to December 2024), physical damage to infrastructure (5.3% damaged/destroyed, 6% non-functional in occupied territories), and increased operating costs (electricity tariff increased by 27.3% in 2024).
• A widespread external cyber-attack on December 12, 2023, caused temporary disruption of network and services, resulting in an estimated $46 million impact on operating revenue for the year ended December 31, 2024, due to a customer appreciation program.
• Restrictions applicable in Ukraine to all foreign-owned companies have limited the upstreaming of dividends and other payments abroad, impacting liquidity and financial flexibility.
• The company's independent auditors included a going concern emphasis paragraph due to material uncertainties related to the ongoing war in Ukraine, potential sanctions, and the ability to maintain its customer base and financial performance.
• Reputational harm due to the association of certain beneficial owners of VEON's largest shareholder (LetterOne) with sanctions, leading some multinational companies to cease transacting with Kyivstar.
• Decline in revenue from international mobile termination rates due to EU policies regulating roaming charges for Ukrainians, which are expected to continue.
• Increased impairment charges of $4 million for the nine months ended September 30, 2025, driven by obsolete equipment and war-related damages.

Risks

• Risks relating to the ongoing war in Ukraine, including adverse economic impact, physical damage to infrastructure, effect of sanctions and export controls on supply chain, volatility in the Ukrainian hryvnia, and potential nationalization or confiscation of operations and assets.
• Risks related to JSC Kyivstar's ability to declare and pay dividends and restrictions on making certain payments abroad due to martial law and legal restrictions in Ukraine.
• Dependence on JSC Kyivstar for distributions, which may be restricted or prohibited, as Kyivstar Group Ltd.'s principal asset is its interest in JSC Kyivstar.
• Work stoppages and other labor matters, including mobilization of employees for military service, which may affect service delivery and restoration.
• Investing in frontier markets (Ukraine and Uzbekistan) is subject to greater risks, including political and economic instability, regulatory and legal uncertainty, social unrest, and conflict.
• Risks associated with cyber-attacks or systems and network disruptions, data protection, and data breaches, including costs and reputational harm, exacerbated by the war in Ukraine.
• Risks relating to the international economic environment, inflationary pressures, geopolitical developments, and unexpected global events causing business decline and impacting customer spending.
• Risks related to the ability to grow communications and digital service offerings, including demands on management, need for approvals, and challenges of integrating acquired businesses.
• Impact of export controls, international trade regulation, customs, and technology regulation on operations and ability to procure necessary goods, software, or technology.
• Risks relating to legislation, regulation, taxation, and currency, including costs of compliance, exchange controls, currency fluctuations, and abrupt changes to laws governing the telecommunications industry.
• Risks that legal challenges, license and regulatory disputes, or tax disputes may not result in a favorable resolution.
• Operational risks, including regulatory uncertainty regarding service offerings, frequency allocations, spectrum capacity constraints, intellectual property rights protection, interconnection agreements, equipment failures, and competitive pressures.
• Inability to keep pace with technological changes and evolving industry standards, harming competitive position.
• Volatility in the market price of common shares, which may decline regardless of operating performance.
• Risks related to status as a foreign private issuer and controlled company, allowing reliance on certain home country governance practices instead of Nasdaq requirements.
• Reduced public company reporting requirements applicable to emerging growth companies may make common shares less attractive to investors.
• Limited experience of certain management team members in operating a public company.
• Increased costs and obligations as a public company, including compliance with corporate governance and financial reporting standards.
• Dependence on third parties for certain services, equipment, infrastructure, and products, with risks of disruption or failure to perform obligations.
• Exposure to foreign currency exchange loss, fluctuation, and translation risks, particularly with the Ukrainian hryvnia.
• Unpredictable revenue performance due to a large majority of customers not having long-term fixed contracts.
• Strategic partnerships and relationships carry inherent business risks, including disagreements or adverse changes in regulatory approach to consolidation.
• Risk of being classified as a passive foreign investment company (PFIC) for U.S. federal income tax purposes, leading to adverse tax consequences for U.S. investors.

Future Outlook

Kyivstar Group expects to continue facing challenges due to the ongoing war in Ukraine but is positioned for growth as the Ukrainian economy recovers. The company intends to invest $1 billion in Ukraine between 2023 and 2027, focusing on network development, energy resilience, technological leadership, digitalization, and strategic M&A. It aims to expand digital offerings, increase multiplay penetration, and grow average revenue per user (ARPU), which is currently low compared to Central and Eastern European nations.

Management Comments

• Management believes all allocations of shared service expenses from Wider VEON Group have been made on a reasonable basis, though they may not reflect standalone costs.
• Management has implemented business continuity plans to address known contingency scenarios and protect employees and operations in Ukraine.
• Management actively monitors liquidity, debt agreement provisions, and equity levels, taking actions to ensure sufficiency and compliance.
• Management is engaging with authorities in Ukraine to address concerns about ownership and management of Kyivstar and to confirm that sanctioned individuals do not participate in management or derive benefits from VEON's Ukrainian assets.
• Management expects actions taken will mitigate the risk associated with identified going concern events and conditions, despite material uncertainty remaining due to the war.

Industry Context

The Ukrainian telecommunications market is highly competitive and fragmented, particularly in the fixed broadband segment with almost 3,000 internet service providers. Kyivstar maintains a leading position in both mobile and fixed broadband. The industry is significantly impacted by the ongoing war in Ukraine, leading to population shifts, infrastructure damage, and regulatory changes like EU roaming policies. Despite these challenges, there's a perceived potential for ARPU growth in Ukraine to levels comparable to other Central and Eastern European nations, given favorable economic developments and predicted GDP growth.

Comparison to Industry Standards

• Kyivstar's average monthly mobile ARPU of $2.8 for the nine months ended September 30, 2024, is significantly lower than the average monthly ARPU of $10.7 across Mobile Network Operators (MNOs) in selected Central and Eastern European countries, indicating substantial growth potential.
• The Ukrainian fixed broadband market is highly fragmented with almost 3,000 internet service providers, where Kyivstar, Ukrtelecom, and Lifecell combined held only 24% of total market subscribers on average for the year ended December 31, 2024. This fragmentation suggests significant consolidation opportunities for larger players like Kyivstar.
• Kyivstar's LTE population coverage of approximately 96% as of December 31, 2024, demonstrates a strong network presence, comparable to leading operators in more developed markets, despite the challenges of operating in a war-torn region.

Management Changes

Corporate Governance

Legal Proceedings

• A claim filed in 2016 by the Ukraine Tax Authority alleging an additional charge of taxes and penalties of approximately $33.9 million for the years 2009-2014 is pending in the court of first instance, awaiting the outcome of a criminal case against the ex-CEO of Private Enterprise Wholesale Company Elbrus.
• A criminal proceeding by the Security Service of Ukraine (SSU) regarding the December 12, 2023 cyber-attack, in which Kyivstar has been identified as the victim, remains open as of the date of this prospectus.

Related Party Transactions

• Kyivstar predominantly uses the network infrastructure of Ukraine Tower Company (UTC), a wholly-owned subsidiary of VEON, under an arms-length Material Lease Agreement (MLA) with an initial term of seven years and renewal options. Payments to UTC were $61 million in 2024 and $50 million in 2023.
• JSC Kyivstar provides certain shared services to UTC (accounting, legal, treasury, etc.) and leases IT equipment, vehicles, and office facilities to UTC.
• JSC Kyivstar has a Framework Sale and Purchase Agreement with UTC for the sale of equipment, with UTC paying $10.8 million in 2024 and $2.9 million in 2023.
• A General Services Agreement with VEON, effective through December 31, 2028, for technical, strategic, legal, and HR support services. Kyivstar compensated VEON for approximately $2.6 million in 2024 under this agreement.
• An Agency and Services Agreement with VEON Wholesale Services B.V. for international roaming and telecommunications services, which was terminated on March 31, 2024. Kyivstar paid VEON approximately $4.4 million in 2024 under this agreement.
• VEON Ltd. entered into an agreement with Impact Investments LLC (Michael R. Pompeo is Executive Chairman) for strategic support and board advisory services to VEON Ltd. and JSC Kyivstar. $0.4 million in cash and $7 million in share-based payments were recognized as expense in 2024.
• JSC Kyivstar has a services agreement with Delta Strategy & Ventures LLC (Dmytro Shymkiv is CEO) for strategic support and board advisory services, with cash payments of approximately $136,500 in 2024 and $100,300 through April 25, 2025.
• Kyivstar Group Ltd. issued a Loan Note Payable of $178 million to VEON Amsterdam B.V. on August 13, 2025, bearing 10% interest, with a $124 million repayment made on September 17, 2025.

Stakeholder Impact

• Shareholders: Potential for dilution from future equity issuances and warrant exercises. Value of shares may be impacted by market volatility, war-related risks, and VEON's majority control. No dividends expected in the foreseeable future.
• Employees: Continued support through emergency aid, flexible work arrangements, and psychological support programs. Risk of work perturbation and deficiencies due to mobilization efforts related to the war.
• Customers: Impacted by war-related disruptions, including service outages and migration. Benefits from network resilience investments, customer appreciation programs, and 'Roam Like at Home' offers. Expansion of digital services aims to enhance customer value.
• Suppliers: Challenges in transacting with certain multinational companies due to perceived affiliation with Russia and sanctions, potentially impacting supply chain and access to equipment.
• Creditors: Indebtedness and debt service obligations could decrease cash flow. Capital controls in Ukraine restrict international transfers, potentially affecting ability to repay debt or comply with covenants.

Next Steps

• Continue to pursue strategic, opportunistic acquisitions to drive digital revenue and build out the digital ecosystem.
• Actively participate in upcoming spectrum auctions to expand network capacity and enhance service quality.
• Further develop core business through network development, energy resilience, technological leadership, and digitalization.
• Implement a discretionary short-term, cash-based incentive plan (STIP) and a discretionary long-term, share-based compensation plan (LTIP) for employees and management.
• Continue efforts to remove remaining restrictions on corporate rights in Kyivstar and its Ukrainian subsidiaries with the local custodian.

Key Dates

Recommendation

Kyivstar Group demonstrates strong underlying operational performance, market leadership in Ukraine's telecom and digital sectors, and a clear strategic vision for growth through network investment and digital expansion. The recent Nasdaq listing provides increased visibility and access to capital. However, the significant and unpredictable risks associated with the ongoing war in Ukraine, including potential nationalization, sanctions, and currency volatility, create substantial uncertainty. While the company has shown resilience and implemented mitigation measures, these external factors could materially impact future financial performance and asset values. A 'hold' recommendation is appropriate, acknowledging the company's strengths and growth potential while emphasizing the high geopolitical risks that warrant caution and close monitoring.

Keywords

Telecommunications, Ukraine, Digital Services, Mobile Network Operator, Broadband, Nasdaq Listing, SEC Filing, Kyivstar, VEON, Uklon, Helsi, SPAC Merger, F-1/A, Financial Results, Risk Factors, Corporate Governance, Investment