F-1: Kyivstar Group Ltd. Registers Shares for Nasdaq Listing

Kyivstar Group Ltd. has filed an F-1 registration statement for the resale of 213.7 million common shares and the issuance of 7.6 million shares upon warrant exercise, following its business combination and Nasdaq listing.

Summary

• Kyivstar Group Ltd. (the Company) is registering up to 213,710,538 common shares for resale by selling securityholders and 7,666,629 common shares for issuance upon exercise of public warrants.
• The registration follows the consummation of a business combination on August 14, 2025, where VEON Holdings B.V. became a direct, wholly-owned subsidiary of Kyivstar Group Ltd., and Cohen Circle Acquisition Corp. I merged into a subsidiary of Kyivstar Group Ltd.
• The Company's common shares and warrants began trading on Nasdaq under symbols KYIV and KYIVW, respectively, on August 15, 2025.
• For the year ended December 31, 2024, the Company reported a profit of $283 million and Adjusted EBITDA of $515 million, with a profit margin of 31% and Adjusted EBITDA Margin of 56%.
• For the six months ended June 30, 2025, profit was $126 million and Adjusted EBITDA was $306 million, with a profit margin of 23% and Adjusted EBITDA Margin of 57%.
• Mobile customers decreased from 23.9 million in 2023 to 23.0 million in 2024, and further to 22.4 million by June 30, 2025, primarily due to the war in Ukraine.
• Mobile Average Revenue Per User (ARPU) increased from $2.90 in 2023 to $3.00 in 2024, and to $3.44 for the six months ended June 30, 2025.
• The Company is Ukraine's leading mobile communication provider by subscribers (over 23 million) and broadband services by access lines (over 1.1 million) as of December 31, 2024.
• Strategic acquisitions include a controlling stake in Helsi (digital healthcare) in August 2022 (increased to 97.99% in May 2025), Lan Trace (fixed broadband) in September 2024 for $2 million, and Uklon (ride-hailing and delivery) in April 2025 for $158 million.
• VEON Amsterdam B.V. beneficially owns approximately 89.6% of Kyivstar Group Ltd.'s outstanding common shares, making it a controlled company under Nasdaq rules.

Sentiment

Score: 7

Explanation: The company demonstrates strong operational resilience and profitability despite the severe geopolitical challenges in Ukraine, with strategic acquisitions and a clear growth strategy. However, significant risks related to the ongoing war, potential nationalization, sanctions, and regulatory uncertainties temper the overall sentiment.

Positives

• Maintained strong operational efficiency and profitability with a 57% Adjusted EBITDA Margin for H1 2025, despite the ongoing war in Ukraine.
• Successfully increased Mobile ARPU from $2.90 in 2023 to $3.44 in H1 2025, indicating effective monetization strategies.
• Expanded digital services portfolio through strategic acquisitions of Helsi (digital healthcare) and Uklon (ride-hailing and delivery), diversifying revenue streams.
• Demonstrated commitment to network resilience and development by investing $45.3 million in infrastructure reconstruction in 2024 and installing 2,600 generators and 176,000 additional batteries.
• Secured new 15-year spectrum licenses in the 2100 MHz and 2300 MHz bands for UAH 1.43 billion ($34.7 million) in November 2024, enhancing network capacity.
• Achieved a high employee engagement rate of 86% in 2024, reflecting effective management and support during challenging times.
• The Shevchenkivskyi District Court of Kyiv ruled to unfreeze 47.85% of VEON's corporate rights in JSC Kyivstar and 100% in other Ukrainian subsidiaries on November 29, 2024, removing significant restrictions.
• Launched 'Roam Like at Home' offering, retaining approximately 1.2 million subscribers abroad and generating revenue in hard currencies.
• VEON and Kyivstar jointly intend to invest $1 billion in Ukraine between 2023 and 2027, signaling long-term commitment and growth potential.

Negatives

• Experienced a decline of approximately 3.1 million mobile subscribers from January 2022 to December 2024 due to migration, loss of territories, and technical clean-up.
• Incurred significant costs related to security, fuel for diesel generators, batteries, and mitigation measures, totaling $45.3 million in 2024, expected to continue while the war persists.
• Suffered reputational harm due to the association of certain beneficial owners of VEON's largest shareholder (LetterOne) with sanctions, leading some partners to cease transacting.
• The ongoing war in Ukraine has caused partial damage to 5.3% of the combined telecommunication network, with 6% non-functional in Russian-occupied territories as of December 31, 2024.
• Did not receive payment for war-related insurance claims from 2022 in 2023 and 2024, and war-related coverage became unavailable in 2023.
• Experienced a decline in revenue and profit margin from international mobile termination rates due to EU policies regulating roaming charges for Ukrainians.
• Subject to restrictions on making certain payments abroad (e.g., investments, interest, principal payments on loans, financing of affiliate companies offshore) due to martial law in Ukraine.
• The cyber-attack on December 12, 2023, resulted in a temporary disruption of network services and an estimated $23 million and $46 million impact on operating revenue for 2023 and 2024, respectively, due to customer appreciation programs.

Risks

• Ongoing war in Ukraine poses risks of adverse economic impact, physical damage to infrastructure, supply chain disruptions due to sanctions and export controls, volatility in Ukrainian hryvnia, and potential nationalization or confiscation of assets.
• JSC Kyivstar's ability to declare and pay dividends and make certain payments abroad is restricted by martial law and other legal limitations in Ukraine.
• Kyivstar Group Ltd.'s principal asset is its interest in JSC Kyivstar, making it dependent on distributions that may be restricted or prohibited.
• Work stoppages and other labor matters, including mobilization efforts due to the war, could adversely impact business operations and service delivery.
• Investing in frontier markets like Ukraine and Uzbekistan is subject to greater risks, including political and economic instability, regulatory uncertainty, social unrest, and conflict.
• Exposure to cyber-attacks and systems/network disruptions, data protection breaches, or the perception of such attacks, leading to service degradation, data leakage, and reputational harm.
• The international economic environment, inflationary pressures, geopolitical developments, and unexpected global events could cause business decline and impact customer spending patterns.
• Inability to keep pace with rapid technological changes and evolving industry standards could harm competitive position and require substantial, potentially unrecoverable, investments.
• Challenges in securing adequate spectrum or licenses, especially for 5G, and high acquisition/deployment costs could adversely affect service quality and increase operating expenses.
• The telecommunications industry is highly capital intensive, requiring substantial ongoing expenditures, which may be difficult to fund if resources are insufficient or capital markets are inaccessible.
• Exposure to foreign currency exchange loss, fluctuation, and translation risks, particularly with the Ukrainian hryvnia's volatility and potential depreciation against the U.S. dollar.
• Revenue performance can be unpredictable as a large majority of customers are on prepaid plans without long-term fixed contracts.
• Strategic partnerships and relationships carry inherent business risks, including disagreements, non-compliance by partners, and difficulties in exiting initiatives.
• Inability to retain or motivate key personnel, hire qualified personnel, or implement strategic goals due to intense competition and the impact of the war.
• Core growth strategies of expanding digital offerings and investing in 4G connectivity may not be successful due to barriers to adoption, regulatory limitations, and high investment costs.
• Acquisitions and divestitures involve numerous risks, including integration difficulties, diversion of resources, failure to realize anticipated benefits, and increased indebtedness.
• Subject to competition and antitrust laws, potentially leading to investigations, fines, or operating restrictions.
• Dependence on third parties for certain services, equipment, infrastructure, and products, with risks of supply chain disruptions, non-performance, or unfavorable terms.
• Loss of important intellectual property rights or 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.
• Subject to an extensive variety of laws and an uncertain judicial and regulatory environment, potentially resulting in unanticipated outcomes, fines, or license suspensions.
• Violations of and changes to applicable sanctions and embargo laws, including export control restrictions, may harm the business and ability to transact with international partners.
• Could be subject to tax claims and repeated tax audits, leading to additional costs, penalties, or criminal investigations.
• Changes in tax treaties, laws, rules, or interpretations, including the recognition and recoverability of deferred tax assets, could harm the business.
• Changes in regulatory requirements in banking and other financial systems and currency control requirements restrict activities, including international transfers and dividend remittances.
• New or proposed changes to laws or new interpretations of existing laws, such as SIM verification, data localization, and data protection, may harm the business.
• Risk of fraud or other misconduct by employees, partners, or third parties, leading to litigation, financial losses, fines, or reputational damage.
• Dependence on VEON for certain services, assets (e.g., UTC network infrastructure), and potential funding, with risks if VEON experiences challenges.
• VEON's majority ownership (89.6%) gives it significant influence over corporate matters, potentially limiting other shareholders' ability to influence outcomes.
• Various factors may limit the ability to declare and pay dividends, and shareholders should not rely on dividend income.
• The market price of common shares may be volatile or decline regardless of operating performance, and the de-SPAC transaction may lead to increased scrutiny.
• A market for common shares may not develop or be sustained, affecting liquidity and price.
• Risk of significant expenses or struggles to execute strategies due to securities litigation, shareholder activism, or regulatory actions.
• The only principal asset of Kyivstar Group Ltd. is its interest in JSC Kyivstar, making it dependent on distributions from JSC Kyivstar.
• Issuance of additional shares or other debt/equity securities could dilute ownership and adversely affect share price.
• Future resales of a substantial number of common shares by selling securityholders could significantly depress the market price.
• As a controlled company and foreign private issuer, Kyivstar Group Ltd. qualifies for exemptions from certain Nasdaq corporate governance and reporting requirements, which may provide less protection to investors.
• Limited experience of certain management team members in operating a public company could lead to challenges in regulatory oversight and reporting obligations.
• Increased costs and obligations as a public company, diverting management attention and resources.
• Failure to timely and effectively implement appropriate internal controls and procedures could adversely affect business and reputation.
• 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 Ltd., together with VEON, intends to invest $1 billion in Ukraine between 2023 and 2027, focusing on network development, energy resilience, technological leadership, digitalization, and strategic M&A to drive digital revenue and expand its digital ecosystem. The Company plans to actively participate in upcoming spectrum auctions to enhance network capacity and service quality. It aims to further increase ARPU by introducing premium services and upselling existing offerings, expecting growth to levels comparable to Central and Eastern European nations with favorable economic developments in Ukraine.

Management Comments

• Management believes their diverse multiservice product offering, combined with high network reliability, fosters customer loyalty and supports their premium pricing strategy.
• Management considers that all allocations of shared service expenses from Wider VEON Group have been made on a reasonable basis.
• Management believes it is not practicable to estimate the actual costs that would have been incurred had the Company been a standalone company during the periods presented.
• Management expects the actions taken or to be taken will mitigate the risk associated with the identified events and conditions related to the going concern uncertainty.
• Management is actively monitoring new developments in applicable sanctions to ensure compliance and evaluate potential impacts.
• Management is engaging with authorities in Ukraine to address concerns about ownership and management and to confirm that Russian nationals do not participate in Kyivstar's management or derive benefits from VEON's Ukrainian assets.
• Management believes there is significant room for additional ARPU growth in Ukraine, expecting it to increase to levels comparable to Central and Eastern European nations with favorable economic developments.

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 roaming regulations, which could eliminate roaming charges for Ukrainian customers in the EU. The industry is characterized by rapidly evolving technology, requiring continuous investment in 4G/LTE and preparations for 5G. Geopolitical instability and macroeconomic pressures, particularly the war in Ukraine, significantly impact the operating environment, customer demand, and supply chains.

Comparison to Industry Standards

• Kyivstar's average monthly Mobile ARPU in Ukraine was $2.8 in the nine months ended September 30, 2024, which is significantly lower compared to the average monthly ARPU across Mobile Network Operators (MNOs) in selected Central and Eastern European countries of $10.7.
• Kyivstar holds over 47% of the mobile market share in Ukraine by number of customers as of December 31, 2024, maintaining a top position for the past seven years, indicating strong competitive standing within its local market.
• In the fixed broadband segment, Kyivstar is the leading provider by number of access lines with an estimated market share of 14% as of December 31, 2024, in a highly fragmented market with almost 2,000 operators. The top three providers (Kyivstar, Ukrtelecom, Lifecell) combined held 24% of total market subscribers.
• Kyivstar's employee engagement rate of 86% in 2024, as per a third-party survey, is considered high (above 70% is high), suggesting strong internal performance relative to general industry benchmarks for employee satisfaction and retention.

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.
• Ukrainian courts froze corporate rights in VEON's Ukrainian subsidiaries (47.85% of JSC Kyivstar, 100% of Ukraine Tower Company, 100% of Kyivstar.Tech, and 69.99% of Helsi) from October 6, 2023, through November 29, 2024, in connection with criminal proceedings against Mikhail Fridman, which are unrelated to VEON or Kyivstar.
• On November 29, 2024, the Shevchenkivskyi District Court of Kyiv ruled to unfreeze the corporate rights in JSC Kyivstar and other Ukrainian subsidiaries, removing the restrictions.
• In April 2024, the Ukrainian custodian of VEON's shares in JSC Kyivstar marked all VEON's shares as non-voting, citing the previous freezing order (now lifted) and sanctioned individuals being ultimate beneficiaries; this issue is ongoing.
• 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 filing date.
• In September 2024, the Ministry of Justice of Ukraine reportedly filed a suit seeking confiscation of shares in various companies related to Mikhail Fridman, Petr Aven, and Andrey Kosogov, though none directly related to VEON or Kyivstar.

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, with human resources costs compensated by UTC.
• A Framework Sale and Purchase Agreement (Framework SPA) between JSC Kyivstar and UTC requires JSC Kyivstar to sell equipment to UTC, 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, commercial, strategic, legal, tax, treasury, and HR support. No payments were made in 2022, 2023, or 2024, but $2.6 million was settled with VEON in 2024 using credit funds.
• An Agency and Services Agreement with VEON Wholesale Services B.V. for international roaming and telecommunications services was terminated on March 31, 2024. Kyivstar paid VEON approximately $4.4 million in 2024 under this agreement.
• VEON Ltd. entered into a 2024 Agreement with Impact Investments LLC for strategic support and board advisory services to VEON Ltd. and JSC Kyivstar. Michael R. Pompeo, a director of Kyivstar Group Ltd., serves as Executive Chairman of Impact Investments. $0.4 million in cash and $7 million in share-based payments were recognized as expenses in 2024.
• JSC Kyivstar has a services agreement with Delta Strategy & Ventures LLC, which facilitates the engagement of Dmytro Shymkiv (a director of Kyivstar Group Ltd. and CEO of Delta) for advisory services. Cash payments to Delta amounted to approximately $136,500 in 2024 and $100,300 through April 25, 2025.

Stakeholder Impact

• Shareholders: The Nasdaq listing provides a unique investment opportunity in Ukraine's recovery, but VEON's majority ownership limits influence. The war in Ukraine and associated risks (nationalization, sanctions) pose significant threats to investment value and dividend payments.
• Employees: The Company prioritizes employee safety and well-being during the war, providing emergency support, flexible work arrangements, protective equipment, and psychological support, leading to high employee engagement. However, mobilization efforts and migration pose risks to personnel continuity.
• Customers: The war has led to subscriber losses and changes in demand patterns. The Company's focus on network resilience, 'Roam Like at Home' offers, and customer appreciation programs aim to retain and support customers during disruptions. The cyber-attack in December 2023 temporarily disrupted services for customers.
• Suppliers: Sanctions and reputational concerns have led some multinational companies and firms to cease transacting with Kyivstar or its affiliates, potentially impacting access to critical equipment and services. Dependence on third-party suppliers, including UTC, creates operational risks.
• Creditors: The Company's ability to repay debt and comply with covenants could be impacted by currency volatility, capital controls, and potential nationalization risks. Repayment of 2025 Bonds and the Seller Loan Note are significant financial events.

Next Steps

• Continue to execute the joint intention with VEON to invest $1 billion in Ukraine between 2023 and 2027, focusing on network development, energy resilience, technological leadership, and digitalization.
• Actively participate in upcoming spectrum auctions to expand network capacity and enhance service quality.
• Further increase ARPU by introducing premium services and upselling existing offerings.
• Continue working with local custodians to remove any remaining restrictions on corporate rights following the unfreezing decision.
• Implement remediation and mitigation actions to reduce current cybersecurity risks and establish a robust framework for managing evolving cyber threats.
• Complete the provisional accounting for the Uklon acquisition within the 12-month measurement period (ending April 2, 2026).
• Continue negotiations on a collective agreement with the Trade Union Committee of the Primary Trade Union Organization (Nash Kyivstar) after the end of martial law.

Key Dates

Recommendation

Kyivstar Group Ltd. demonstrates remarkable operational resilience and strategic growth in a challenging environment, evidenced by strong Adjusted EBITDA margins and increasing ARPU despite subscriber losses due to the war in Ukraine. The Nasdaq listing and strategic acquisitions like Uklon and Helsi position the company for future digital expansion and market leadership. However, the extreme geopolitical risks associated with the ongoing war, including potential nationalization, sanctions, currency volatility, and infrastructure damage, introduce substantial uncertainty. While the company has shown an ability to mitigate some of these risks, they remain significant and unpredictable. Therefore, a 'hold' recommendation is appropriate for seasoned investors, acknowledging the company's strong underlying business and growth potential while emphasizing the high-risk operating environment that could significantly impact future performance and share price.

Keywords

Telecommunications, Digital Services, Ukraine, Nasdaq Listing, Mobile Operator, Broadband, SEC Filing, F-1 Registration, Business Combination, Kyivstar, VEON, Helsi, Uklon, Spectrum, Cybersecurity, War Impact, Emerging Growth Company, Foreign Private Issuer, Controlled Company, ARPU, EBITDA, Capital Expenditures