VEON Unlocks Value with Kyivstar Spin-Off

The upcoming Kyivstar listing is far more than a financial transaction. By carving out Ukraine’s leading mobile and digital player and floating it on Nasdaq through a reputable partner like Cohen Circle Acquisition Corp. I (CCIR), VEON Ltd (VEON) is proving it can unlock hidden value that was long trapped behind a conglomerate discount.

Kyivstar’s strong cash flows, sticky multiplay customers, and expanding ecosystem in areas like ride-hailing and e-health show exactly how VEON’s best assets can stand on their own. The upcoming spinoff is expected to deliver reliable dividends back to the parent once capital controls are lifted, strengthening VEON’s balance sheet..

More importantly, this playbook should also set the precedent for future spin-offs, such as JazzCash. It is about building a portfolio of high growth digital services companies across its markets, each able to attract global capital and reinvest locally, rather than a future about squeezing legacy telco margins. If the stock market rewards this approach with better multiples and stronger governance trust for Kyivstar, VEON’s transformation could unlock meaningful value for patient investors ready to bet on frontier markets evolving into digital-first economies.

Inside the Kyivstar Deal: VEON’s Blueprint for Unlocking Hidden Value

VEON currently owns 100% of Kyivstar, Ukraine’s largest mobile and digital operator both in terms of mobile and broadband subscribers. To unlock value, VEON is spinning Kyivstar out as an independent company that will be listed on the Nasdaq in the U.S. The way it is doing this is through a business combination of Kyivstar with Cohen Circle Acquisition Corp. I, which is a SPAC backed by accomplished financier Betsy Cohen. When the deal closes, expected in Q3 2025, Kyivstar will become a separately traded company with the new ticker “KYIV.”

VEON will retain about 87% ownership of Kyivstar, preserving control, and thus maintaining high economic exposure to its strong $315 million of annual free cash flow generation, which should become an upstream dividend stream once capital controls are eased in Ukraine. We expect VEON to use these cash flows to reduce debt. Although Cohen Circle’s trust account holds about $238 million, this capital primarily protects against redemptions by SPAC investors, so Kyivstar itself may receive little to none of that trust amount for operating needs unless additional capital is raised through a PIPE. Investors should view the trust funds more as a mechanism to secure deal certainty than as guaranteed new growth capital for Kyivstar.

To further strengthen deal certainty, VEON has secured firm non-redemption agreements totaling approximately $52 million from reputable institutional backers such as Helikon and Clearline Capital. These commitments satisfy Cohen Circle’s minimum cash condition, reducing the risk of a failed closing if public shareholders redeem their SPAC shares. While Kyivstar itself may still need additional funding for future network and digital investments, this layer of investor support demonstrates VEON’s ability to line up credible partners and keep the transaction on track despite volatile capital markets.

Investors buying shares of Kyivstar will gain exposure to a pure-play Ukrainian growth story, while VEON unlocks the hidden value of one of its top-performing assets and sets the stage for spinning off other assets in its corporate portfolio, such as JazzCash, in the future.

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Unlocking Kyivstar: How VEON’s Strategic Carve-Out Could Redefine Its Entire Portfolio

Kyivstar’s spin-off through Cohen Circle is not just about capital markets optics, it is a catalyst for an institutional-grade re-rating for VEON’s entire business model. At a pro forma equity value of $2.2 billion and an enterprise value of about $2.06 billion (based on 3.7x Q1 2025 LTM Adj. EBITDA of $562 million), Kyivstar is being conservatively positioned well below peers trading at 6-7x multiples. VEON will roll over $1.97 billion in equity, retaining approximately 87% of Kyivstar depending on the level of redemptions, which means its residual stake alone could expand to over $3.5 billion if Kyivstar is re-rated post-listing, especially if Ukraine’s macro recovery sustains.

The immediate benefit to VEON is liquidity: $198 million in secondary proceeds will pay down the 2025 Notes, trimming its net debt-to-EBITDA ratio (already down to 1.2x) further and freeing up interest costs for reinvestment. Kyivstar’s robust free cash flow, around $315 million after CAPEX on an LTM basis, gives VEON a powerful upstream dividend channel, even amid FX and currency control risks. For perspective, Kyivstar contributes almost a third of VEON’s consolidated cash flows, but has some of the group’s highest EBITDA margins (57% LTM) and a pristine balance sheet (no external debt, $489 million in cash equivalents).

But the bigger story is the precedent: a successful Kyivstar transaction will demonstrate that VEON can create real public market price discovery for undervalued assets. Cohen Circle’s SPAC structure includes a trust account of about $238 million plus a potential PIPE backstop to protect against redemption risk. This ensures Kyivstar’s post-close balance sheet stays flexible enough to fund growth initiatives. It also keeps governance credible: the Supervisory Board merges VEON’s strategic oversight with independent scrutiny under Nasdaq’s standards, lifting VEON’s perceived governance quality, long a sore point for some institutional investors.

Kyivstar’s digital flywheel is another reason the company’s shares will likely trade up over time. Its multiplay base reached 6.1 million subscribers in Q1 2025, up 40% YoY, with these users delivering ARPU multiples of 3-4x versus legacy subscribers. Helsi, Ukraine’s largest digital health platform, brings 29 million registered patients, about two-thirds of the country’s population, into its digital ecosystem. Uklon, the ride-sharing app which handled 100 million rides and 3 million deliveries last year, embeds high-frequency transaction flows that boost stickiness. These two verticals drive high-margin non-telco revenue, explaining why Kyivstar’s ARPU jumped 54% in Q1 2025 alone (albeit partly boosted by the prior year’s cyberattack compensation program).

If the model holds, Kyivstar could close the ARPU gap with Central and Eastern Europe (CEE) peers like Poland and Romania, where ARPU is 3-4x higher than in Ukraine. The company’s strategic partnership with Starlink for direct-to-cell service enhances network coverage. Its spectrum wins in 2100 MHz and 2300 MHz bands strengthen its capacity to lead in 4G and future 5G deployments, another factor underpinning sustainable monetization.

The real mark for VEON’s future lies in JazzCash, its Pakistani fintech unit that already makes up a large share of the group’s direct digital revenues, which rose 50% YoY in 1Q 2025. JazzCash posted 66% revenue growth, serves over 20 million customers, and issues around 150,000 nano-loans daily. It is a proven high-margin platform akin to M-Pesa or other emerging market fintech flywheels. If Kyivstar’s carve-out succeeds in attracting institutional capital and achieves a higher valuation as a separate entity, VEON will almost certainly replicate the spin-off strategy for JazzCash. This could unlock billions more in hidden value. For example, with its scale and growth, JazzCash might command 8-10x EV/EBITDA, multiples more typical for leading digital finance players in high-growth frontier markets.

In short, Kyivstar’s success could set VEON on a clear path to becoming diversified for cash-rich regional digital operators with separate listings and local governance. By systematically developing, growing, and then spinning out crown-jewel assets like Kyivstar and, potentially, JazzCash, VEON reduces the conglomerate discount that has historically weighed on its share price. It also generates secondary liquidity to recycle capital into new markets, debt reduction, or shareholder distributions, all while aligning with global governance standards that unlock fresh investor pools.

If Kyivstar compounds ARPU, multiplay penetration, and digital service adoption, its free cash flow could reach around $400 million within 24–36 months, up from roughly $315 million LTM today and about $300 million for full-year 2024 after CAPEX. This growth would provide VEON with a stable hard-currency dividend stream, even in a volatile FX environment. For long-term holders, this is the essence of the thesis: spin, unlock, reinvest, systematically turning underappreciated frontier assets into scalable, cash-generative, standalone entities that re-rate as macro and governance risk decline.

VEON’s Next Phase: Building a Resilient Digital Frontier Compounder

Looking beyond the immediate Kyivstar listing, VEON’s Q1 2025 trajectory hints at an overlooked structural advantage: its ability to keep compounding free cash flow even as it navigates FX risk, local capital controls, and frontier market geopolitical shocks. With direct digital revenues contributing over 14% of group revenue in Q1 2025, up from barely 10% a year ago, VEON’s operating DNA is shifting from pure connectivity to recurring, high-margin digital services that ride on its existing subscriber base.

When Kyivstar is spun out, VEON’s balance sheet will be lighter, though Kyivstar’s results will remain consolidated, so reported revenue will still reflect its contribution. In Q1, VEON’s revenue reached $1.03 billion, with direct digital sales jumping 50% YoY to 14% of the total, driven partly by Kyivstar’s multiplay momentum. The listing spotlights Kyivstar’s premium digital cash flows and sets a precedent for spin-offs like JazzCash to follow. This supports VEON’s goal for 12–14% local-currency revenue growth in FY25, helping keep its topline ahead of local inflation and unlocking a repeatable spin-monetize-reinvest playbook.

One underappreciated dynamic is that Kyivstar, as Ukraine’s largest digital operator, earns a portion of its revenue from roaming fees, international interconnect, and enterprise services that are often denominated in or linked to USD or EUR. This means its cash flow includes some hard-currency exposure, which helps VEON offset local currency risk. While Ukrainian FX and capital repatriation controls still limit how much can be remitted each year, VEON’s track record shows it can upstream dividends under tight regimes when conditions allow. If Kyivstar sustains this cash generation and ARPU growth, VEON’s HQ could eventually deploy these hard-currency flows into selective buybacks, similar to its $23 million ADS repurchase under Phase 2, or small regional bolt-on M&A where digital adjacencies create cross-market synergies. exposure

This matters because VEON’s other markets, Pakistan, Bangladesh, Uzbekistan, and Kazakhstan, still operate with structurally different macro risks. For example, JazzCash’s daily nano-loan flywheel is underpinned by Pakistan’s huge unbanked population. However, rising local political tensions or monetary tightening could crimp liquidity in that market. By contrast, Ukraine’s partial decoupling from VEON’s consolidated debt stack gives the group a natural cash diversification hedge.

Another overlooked lever is infrastructure optionality. VEON’s Q1 2025 update shows steady progress in pooling tower assets in Pakistan with Engro, an initiative that could free up $563 million in value. Once Kyivstar’s towers are carved out more transparently (they currently sit at VEON HoldCo), VEON could replicate its asset-light, tower-monetization model across multiple markets. This approach not only releases capital but also reduces operating leverage tied to local FX volatility.

Meanwhile, the debt profile is on a better trajectory than many emerging market telcos. Net debt, excluding leases, fell by $91 million in Q1 2025 alone, bringing net debt to EBITDA down to 1.23x. If Kyivstar’s proceeds and robust free cash flow are layered in, VEON could approach sub-1.0x by 2026, freeing up capacity to reinvest without dilutive equity raises.

Perhaps most importantly, the governance enhancement driven by the Nasdaq listing will be hard to reverse. By raising the bar on compliance, VEON is also better positioned to court Western capital. If it continues to show discipline in spinning out cash-rich assets like JazzCash and eventually its digital adtech or cloud verticals, the conglomerate discount that has stubbornly stuck to VEON for years could finally narrow.

All told, we are on the cusp of witnessing VEON transform from a misunderstood telecom with a patchwork of local licenses into a leaner, more transparent portfolio of regional digital operators that not only generate cash but compound it through disciplined capital recycling. For investors, that means the upside is no longer just about Ukraine’s recovery, it’s about the blueprint that Kyivstar’s success makes possible.

Takeaway

Kyivstar’s spin-off isn’t just a listing, it’s VEON’s repeatable blueprint to surface hidden value, slash debt, and compound high-margin digital cash flows. If Kyivstar re-rates and a JazzCash spin-out follows, investors get frontier growth, hard-currency dividends, and structural upside, turning VEON into a true digital cash engine.