Sonera Sells Lebanese Investment

Sonera has sold its 14% holding in the Lebanese GSM operator LibanCell to Lebanese Telecommunications Company S.A.L for US$22.5 million. Sonera has already received the payment in cash and will record a gain of about US$18.5 million from the deal in the second financial quarter.

Sonera invested in LibanCell in 1994. At the end of 2001, LibanCell had 381,000 subscribers and a 49% share of the Lebanese GSM market. Last year the Lebanese Government cancelled the BOT (Build, Operate and Transfer) contracts of both GSM operators and announced the launch of a tender process to grant two new GSM operating licenses. The process is still ongoing, with the consulting firm KPMG trying to negotiate a settlement between the networks and the government.

"LibanCell was a good investment for us, but as the Lebanese government cancelled the BOT contract, the company's prospects became more uncertain. Moreover, the minority holding in LibanCell was no longer in line with our current strategy, which is aimed at immediate profitable growth in selected markets in the East, such as Russia, Azerbaijan, Georgia, Kazakhstan and Moldova", says Kim Ignatius, Sonera's Executive Vice President and CFO.'"

Posted to the site on 2nd July 2002