SCHEDULE: VEON Ltd. Share Buyback and Shareholder Agreement

VEON Ltd. announces a share buyback program and a related share purchase agreement with LPE Middle East Limited, detailing the repurchase of 72.5 million shares.

Summary

• VEON Ltd. has approved a share buyback program to repurchase and cancel 72,500,000 shares of its common stock.
• A Share Purchase Agreement was entered into between LPE Middle East Limited (LPE) and VEON Ltd. on September 24, 2026.
• Under the agreement, LPE will sell 32,957,830 shares to VEON Ltd. as part of the buyback program.
• VEON Ltd. will also repurchase 39,542,170 shares of common stock represented by ADSs from the market.
• LPE's participation is structured such that after each market repurchase tranche, LPE will sell a proportional number of shares to VEON.
• The price for shares sold by LPE will be half the weighted average price of the on-market ADS repurchases in that tranche.
• LPE, L1TS (Cyprus) Ltd, and Letterone Investment Holdings S.A. collectively beneficially own 840,625,000 shares, representing 45.46% of VEON's outstanding stock.
• The percentages are based on 1,849,190,667 shares of Common Stock outstanding.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing as moderately positive, indicating a structured approach to share repurchases and a significant stake maintained by major shareholders.

Positives

• The company is actively returning capital to shareholders through a significant share buyback program.
• A clear agreement is in place with a major shareholder (LPE) to facilitate a portion of the buyback.
• The buyback structure ensures proportional participation by LPE, maintaining its significant ownership percentage.
• The buyback is structured to cancel shares, which can be accretive to earnings per share.
• Major shareholders (LPE, L1TS, LIHS) continue to hold a substantial stake (45.46%) in the company.

Negatives

• The agreement involves LPE selling shares back to the company at a discounted price (half the weighted average price of market repurchases), which might indicate a strategic move by LPE to reduce its exposure or monetize part of its holding.
• The buyback program involves a substantial number of shares (72.5 million), which could signal a lack of higher-return investment opportunities for the company.

Risks

• The buyback program and the specific share sale agreement with LPE are subject to closing conditions, including the approval of VEON's board of directors for the cancellation of shares.
• LPE's obligations are limited to the sale of specific shares and do not extend to future buyback programs or increases.
• The weighted average price of on-market ADS repurchases, which determines the sale price for LPE's shares, is subject to market volatility.

Future Outlook

The filing details an ongoing share buyback program and a specific agreement for a portion of that buyback with a major shareholder. Future actions will involve the execution of these repurchases, subject to board approval for share cancellation.

Management Comments

• The Reporting Person is the direct beneficial owner of approximately 45.46% of the Issuer's outstanding voting capital stock.
• The calculated percentages are based on 1,849,190,667 shares of Common Stock outstanding based on information provided by the Issuer.
• LPE's obligations under the Share Purchase Agreement are limited to the sale of the Sale Shares and do not extend to participation in any subsequent buyback program or any upsize or increase in the Buyback Program approved by the Issuer after the date of the Share Purchase Agreement.

Industry Context

StockSavvy.ai notes that share buybacks are a common capital allocation strategy in the telecommunications sector, often employed when companies believe their stock is undervalued or to return excess cash to shareholders. This move by VEON Ltd. aligns with such practices, especially given the significant stake held by its major shareholders.

Comparison to Industry Standards

• Many telecommunications companies, such as AT&T and Verizon, regularly engage in share repurchase programs as part of their capital return strategies.
• The structure of this buyback, involving both market repurchases and a negotiated sale with a large shareholder, is a common approach to manage the impact on market price and ensure efficient execution.
• The discount applied to LPE's sale price (50% of the weighted average market price) is a significant incentive for the company to participate, reflecting a desire to facilitate the buyback while potentially allowing LPE to exit a portion of its investment at a predictable rate.

Related Party Transactions

• Share Purchase Agreement between LPE Middle East Limited and VEON Ltd. for the repurchase of 32,957,830 shares of Common Stock.

Stakeholder Impact

• Shareholders: Potential for increased EPS due to share cancellation and potential positive impact on share price from buyback activity.
• LPE Middle East Limited: Will sell a significant portion of its shares to VEON Ltd. at a discounted price, potentially reducing its direct holding while maintaining overall control percentage.
• VEON Ltd.: Will reduce its outstanding share count, potentially improving financial ratios and returning capital to shareholders.

Next Steps

• Execution of the on-market and negotiated repurchases of VEON Ltd. common stock.
• Approval by VEON's board of directors for the cancellation of repurchased shares from issued capital.
• Completion of the sale of 32,957,830 shares by LPE to VEON Ltd. as per the Share Purchase Agreement.

Key Dates

Recommendation

The filing details a share buyback program and a related agreement with a major shareholder. While share buybacks are generally positive, the specific terms of the agreement with LPE, including the discounted sale price, warrant a cautious approach. The significant ownership stake remains unchanged. Therefore, a 'hold' recommendation is appropriate pending further operational or strategic developments.

Keywords

VEON Ltd., Share Buyback, Share Purchase Agreement, LPE Middle East Limited, ADS, Capital Return, Shareholder Agreement, Stock Repurchase