F-1: Kyivstar Group Launches Nasdaq Offering Amidst Ukraine War

Kyivstar Group Ltd., Ukraine's leading mobile and broadband provider, is offering 12.5 million common shares on Nasdaq, reporting strong operational growth despite a one-time listing expense impacting recent net profit.

Summary

• Kyivstar Group Ltd. (Kyivstar) is offering 12,500,000 common shares on the Nasdaq Global Select Market under the symbol KYIV.
• The company is not selling any shares and will not receive proceeds from this offering; all proceeds go to selling shareholders, primarily VEON Amsterdam B.V.
• Kyivstar is Ukraine's leading mobile communication provider by subscribers (over 22.5 million) and broadband services by access lines (over 1.2 million) as of September 30, 2025.
• For the nine months ended September 30, 2025, revenue increased by 25.0% to $836 million, driven by a customer appreciation program in 2024, repricing, and the consolidation of Uklon's revenue.
• Profit for the nine months ended September 30, 2025, was $34 million, significantly lower than $190 million for the same period in 2024, primarily due to a one-time, non-cash listing expense of $162 million.
• Adjusted EBITDA for the nine months ended September 30, 2025, was $477 million, up from $374 million in the prior year, with an Adjusted EBITDA Margin of 57%.
• The company acquired 97% of Uklon, a ride-hailing and delivery platform, for approximately $158 million in April 2025, contributing $46 million in revenue and $14 million in profit before tax since acquisition.
• Kyivstar increased its stake in Helsi, a digital healthcare platform, from 69.99% to 97.99% in May 2025.
• In December 2025, Kyivstar acquired LLC SUNVIN 11, an operational solar power plant with 12.947 MW capacity, for $8.24 million to diversify energy supply.
• A strategic connectivity arrangement with SpaceX's Starlink was launched in November 2025 to provide satellite-to-mobile SMS messaging in areas with impaired terrestrial networks, with plans to expand to voice and mobile broadband in 2026.
• The company and VEON announced a joint intention to invest $1 billion in Ukraine between 2023 and 2027, with $34 million invested in spectrum acquisition in November 2024.
• Kyivstar is a controlled company, with VEON beneficially owning approximately 84.4% of its common shares after this offering.
• The company's independent auditors have included a going concern emphasis paragraph due to the effects of the ongoing war in Ukraine.

Sentiment

Score: 6

Explanation: While the company demonstrates strong operational growth, market leadership, and strategic initiatives, the significant impact of the war in Ukraine, including a 'going concern' warning from auditors, substantial one-time listing expenses, and ongoing geopolitical risks, introduces considerable uncertainty and negatively impacts overall sentiment.

Positives

• Maintained market leadership in Ukraine's mobile communication and fixed broadband sectors, with over 22.5 million mobile customers and 1.2 million broadband subscribers as of September 30, 2025.
• Achieved significant revenue growth of 25.0% to $836 million for the nine months ended September 30, 2025, compared to $669 million in the prior year.
• Demonstrated strong operational efficiency with Adjusted EBITDA increasing to $477 million (57% margin) for the nine months ended September 30, 2025, up from $374 million (56% margin) in 2024.
• Successfully diversified and expanded digital service offerings through strategic acquisitions of Uklon (ride-hailing) and increased stake in Helsi (digital healthcare), contributing to digital revenue growth of over 390% to $74 million.
• Enhanced network resilience and coverage, reaching approximately 96% LTE population coverage and investing $45.3 million in infrastructure reconstruction and preventative measures in 2024.
• Pioneered Starlink Direct-to-Cell satellite technology in Europe, integrating low-Earth orbit satellites for basic communications in Ukraine, with plans for voice and broadband expansion in 2026.
• Committed to a joint $1 billion investment in Ukraine with VEON between 2023 and 2027, focusing on network development, energy resilience, and strategic acquisitions.
• Experienced consistent growth in multiplay users (6.6 million as of September 30, 2025, a 61% increase from 2023) and average monthly ARPU ($3.50 for 9M 2025, up from $2.90 for 9M 2024).
• Maintained a strong employee engagement rate of 86% in 2024 despite the war, supported by emergency aid and flexible work arrangements.

Negatives

• Net profit for the nine months ended September 30, 2025, was significantly impacted, falling 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 has led to a loss of approximately 3.1 million mobile subscribers between January 2022 and December 2024 due to migration, territorial losses, and technical clean-up.
• Incurred substantial war-related operating costs, including $45.3 million in 2024 for security, fuel for generators, batteries, and mitigation measures, with expectations for these costs to continue or increase.
• Experienced a decline in revenue and profit margin from international mobile termination rates due to EU policies regulating roaming charges for Ukrainians and increased emigration.
• Suffered reputational harm and faced challenges in transacting with international financial institutions, rating agencies, and suppliers due to the association of VEON's beneficial owners with sanctions.
• The company's independent auditors have included a going concern emphasis paragraph, indicating material uncertainties related to the ongoing war that may cast significant doubt on its ability to continue as a going concern.
• Exposed to foreign currency exchange losses and volatility, particularly with the Ukrainian hryvnia, which can increase costs for equipment and impact U.S. dollar-denominated results.
• The December 2023 cyber-attack caused temporary service disruptions and resulted in an estimated $46 million impact on operating revenue in 2024 due to a customer appreciation program.

Risks

• Ongoing war in Ukraine: Adverse impact on economic conditions, physical damage to infrastructure and assets, effect of sanctions and export controls on supply chain, volatility in Ukrainian hryvnia, ability to operate and maintain infrastructure, risk of nationalization, and impact on liquidity and going concern.
• Restrictions on JSC Kyivstar's ability to declare and pay dividends and make certain payments abroad due to martial law and other 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, affecting 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.
• Cyber-attacks or systems and network disruptions, data protection, data breaches, or the perception of such attacks or failures, including costs and reputational harm.
• International economic environment, inflationary pressures, geopolitical developments, and unexpected global events causing business decline, impacting customer spending and operational costs.
• Inability 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 macroeconomic environment, operations, and ability to procure goods/technology from third-party suppliers.
• Legislation, regulation, taxation, and currency risks, including compliance costs, exchange controls, currency fluctuations, and abrupt changes to laws governing the telecommunications industry.
• Adjudications, administrative or judicial decisions in legal challenges, license and regulatory disputes, tax disputes, or appeals may not result in favorable resolutions.
• Regulatory uncertainty regarding service offerings, licenses, frequency allocations, spectrum capacity constraints, intellectual property rights protection, interconnection agreements, equipment failures, and competitive pressures.
• Developments from competition, including inability to keep pace with technological changes and evolving industry standards, potentially harming competitive position.
• Volatility or decline in the market price of common shares regardless of operating performance, leading to potential investment loss.
• Status as a foreign private issuer, allowing reliance on home country corporate governance practices instead of certain Nasdaq requirements, potentially offering less protection to investors.
• Status as an emerging growth company, leading to reduced public company reporting requirements, which may make common shares less attractive to investors.
• Status as a controlled company due to VEON's majority ownership, allowing VEON significant influence over corporate matters, potentially limiting other shareholders' influence.
• Inability to raise additional capital or only at significantly increased costs, impacting capital expenditures, investment opportunities, and growth strategy.
• Indebtedness and debt service obligations could decrease cash flow and adversely affect business and financial condition.
• Potential for nationalization or confiscation of operations and assets in Ukraine due to existing or amended nationalization laws and corporate rights seizures.
• 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.
• Inherent business risks in strategic partnerships and joint ventures, including disagreements, investigations, or non-compliance by partners.
• Inability to retain or motivate key personnel, hire qualified personnel, or implement strategic goals/corporate culture through personnel.
• Core growth strategies (expanding digital offerings, investing in 4G connectivity) may not be successful due to barriers to adoption, regulatory limitations, or high costs.
• Inability to successfully implement strategic initiatives, including acquisitions and divestitures, potentially leading to unrealized benefits or increased costs.
• Dependence on third parties for certain services, equipment, infrastructure, and products, with risks of disruption, failure to perform, or unwillingness to transact due to geopolitical events or sanctions.
• Loss of important intellectual property rights or third-party claims of infringement, potentially harming business.
• Insurance coverage, customer indemnifications, or other liability protections may be unavailable or inadequate to cover all significant risks.
• Adoption of new accounting standards and regulatory reviews could affect reported results and financial position.
• Claims of U.S. civil liabilities may not be enforceable against VEON Amsterdam, its board, senior management, and controlling persons.
• Inability to maintain an effective system of internal controls and compliance, adversely affecting business and reputation.
• Potential for the company to be classified as a passive foreign investment company (PFIC) for U.S. federal income tax purposes, resulting in adverse tax consequences for U.S. investors.

Future Outlook

The company plans to expand Starlink Direct-to-Cell satellite technology to voice and mobile broadband services in 2026. It intends to pursue additional strategic, opportunistic acquisitions, focusing on broadband, fiber optics, online healthcare, cloud technologies, and ride-hailing. Kyivstar and VEON have a joint intention to invest $1 billion in Ukraine between 2023 and 2027, focusing on network development, energy resilience, technological leadership, digitalization, and M&A. The company anticipates ARPU growth in the medium term, supported by expected positive GDP growth in Ukraine (2-6% through 2027).

Management Comments

• Management believes its diverse multiservice product offering, combined with high network reliability, fosters customer loyalty and supports its premium pricing strategy.
• Management considers that all allocations of shared service expenses from the Wider VEON Group have been made on a reasonable basis.
• Management believes its cash, cash equivalents, short-term deposits, and short-term investments, together with cash expected to be generated from future operations, will be sufficient to meet working capital and capital expenditure requirements for at least 12 months.

Industry Context

Kyivstar operates in a highly competitive Ukrainian telecommunications market, leading in mobile subscribers and fixed broadband access lines. The fixed broadband segment is fragmented, presenting consolidation opportunities. The company is aligning with EU standards for data protection and roaming, with Ukraine establishing a single roaming area with the EU. The industry is characterized by rapidly evolving technology, requiring continuous investment in 4G/LTE and preparations for 5G. Geopolitical developments, including the ongoing war in Ukraine, significantly impact the operating environment, leading to macroeconomic risks, inflationary pressures, and supply chain disruptions.

Comparison to Industry Standards

• Kyivstar leads the Ukrainian mobile market with over 23.0 million mobile customers as of December 31, 2024, compared to Vodafone (15.8 million) and Lifecell (9.5 million).
• Kyivstar is the leading fixed broadband provider in Ukraine by access lines, with an estimated market share of 13.8% as of March 31, 2025, in a fragmented market with almost 3,000 operators. The top three providers (Kyivstar, Ukrtelecom, Lifecell) had a combined 24% market share.
• Kyivstar's average monthly mobile ARPU in Ukraine was $3.50 for the nine months ended September 30, 2025, which is significantly lower than the average monthly ARPU across MNOs in selected Central and Eastern European countries of $10.7.
• Kyivstar's LTE population coverage was approximately 96% as of December 31, 2024, indicating a strong network presence.

Management Changes

Corporate Governance

Legal Proceedings

• A claim filed by the Ukraine Tax Authority in 2016, 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.
• A criminal proceeding by the Security Service of Ukraine (SSU), in which Kyivstar has been identified as the victim of the December 2023 cyber-attack, remains open as of the date of this prospectus.
• The company has potential tax exposures totaling $53 million as of September 30, 2025, for which no provision is recognized under IAS 37, but does not expect a material financial impact.

Related Party Transactions

• Kyivstar predominantly uses the network infrastructure of Ukraine Tower Company (UTC), a wholly-owned subsidiary of VEON, with payments of $61 million in fees to UTC in 2024.
• JSC Kyivstar provides certain shared services to UTC under service agreements (accounting, legal, treasury, etc.) and leases IT equipment, vehicles, and office facilities to UTC.
• A Framework Sale and Purchase Agreement (Framework SPA) exists with UTC for the sale of equipment, with UTC paying $10.8 million in 2024.
• A General Services Agreement with VEON (effective through December 31, 2028) for corporate advice, financial advisory, tax, legal, and other services, with $2.6 million compensated to VEON in 2024.
• An Agency and Services Agreement with VEON Wholesale Services B.V. for international roaming and telecommunications services, terminated March 31, 2024, with payments of $4.4 million in 2024.
• VEON Ltd. entered into a letter agreement with Impact Investments LLC for strategic support and board advisory services to VEON Ltd. and JSC Kyivstar, with $0.4 million expense recognized in 2024 for cash payments and $7 million for share-based payments.
• A services agreement with Delta Strategy & Ventures LLC for strategic support and board advisory services to JSC Kyivstar, with cash payments of approximately $136,500 in 2024.
• Loan Note Payable of $178 million issued to VEON Amsterdam B.V. in connection with the Business Combination, with a remaining balance of $56 million as of September 30, 2025, after a $124 million repayment.

Stakeholder Impact

• Shareholders: The offering allows selling shareholders to monetize their holdings. New public shareholders face risks associated with the ongoing war, controlled company status, and foreign private issuer exemptions. The 'going concern' warning highlights significant investment risk.
• Employees: The company prioritizes employee safety and well-being in Ukraine, providing emergency support, flexible work, and psychological aid, contributing to high employee engagement (86% in 2024). However, mobilization efforts due to the war pose a risk to personnel continuity.
• Customers: Kyivstar aims to retain customers through network resilience investments, customer appreciation programs (e.g., after cyber-attack), and 'Roam Like at Home' offers. The Starlink partnership enhances service continuity. However, war-related disruptions and population shifts impact the customer base.
• Suppliers: The company relies on third-party suppliers for equipment and services, facing potential disruptions due to sanctions, export controls, and geopolitical events, which could impact business continuity.
• Creditors: The company's ability to repay debt and comply with covenants is subject to the ongoing war's impact on liquidity and cash flow, as well as currency controls and restrictions on international transfers.

Next Steps

• Expand Starlink Direct-to-Cell satellite technology to voice and mobile broadband services in 2026.
• Proceed with the potential acquisition of Tabletki.ua, subject to regulatory approvals.
• Actively participate in upcoming spectrum auctions to expand network capacity and enhance service quality.
• Continue executing the joint $1 billion investment in Ukraine with VEON between 2023 and 2027.
• Further grow digital offerings organically, including building AI and Generative AI solutions and scaling managed security provider practice.
• Continue to work with local custodian to remove any remaining restrictions on corporate rights in Ukrainian subsidiaries.

Key Dates

Recommendation

Kyivstar Group demonstrates strong operational performance, market leadership in Ukraine's mobile and broadband sectors, and a clear strategic vision for digital expansion and network resilience. Recent acquisitions and the Starlink partnership highlight proactive growth initiatives. However, the 'going concern' emphasis from auditors, the significant impact of the ongoing war in Ukraine on net profit (due to a one-time listing expense and operational challenges), and the inherent geopolitical risks in a frontier market warrant a cautious 'hold' recommendation. While the long-term potential in a post-war recovery is noted, the immediate uncertainties and external pressures make it difficult to confidently recommend a 'buy' at this time. Investors should monitor the geopolitical situation and the company's ability to navigate these extreme challenges.

Keywords

Telecommunications, Digital Services, Ukraine, Mobile Operator, Broadband, Nasdaq Listing, SEC Filing, Kyivstar, VEON, Uklon, Helsi, Starlink, F-1 Registration, Investment, Emerging Market