Telia to sell international carrier business for $1 billion

STOCKHOLM (Reuters) – Telia TELIA.ST has agreed to sell its international carrier business, Telia Carrier, to Polhem Infra for 9.45 billion Swedish crowns ($1.06 billion) on a cash and debt free basis, the operator said on Tuesday.

Since taking over the top job at Telia in May, CEO Allison Kirkby has been streamlining the company’s operations, including selling its stake in mobile operator Turkcell TCELL.IS to bring to an end a long-running dispute between its main shareholders.

The appointment of Kirkby, a former CEO at rival telecom operators Tele2 TEL2b.ST and TDC, has sparked investor expectations that she can boost returns at Telia.

“The majority of the proceeds from the sale will be used to strengthen our balance sheet and thereby provide a solid financial base for Telia Company and our shareholders,” Kirkby said in a statement.

Telia shares, having gained around 13% since Kirkby joined the firm, were up 4.5% by 0901 GMT, hitting their highest levels since March and one of the top performers on the pan-European STOXX 600 index .STOXX.

Jefferies said the sale of Telia Carrier appeared supportive and highlighted the use of near 30% of proceeds to top up the dividend.

“This is a welcome first move of the new, highly respected CEO,” the investment bank said in a note.

Barclays said the big question remained the dividend policy from 2021, adding in a note that the company “should be able to deliver a growing dividend off the 2020 base”.

Polhem Infra, founded last year, is jointly owned by the First AP Fund, Third AP Fund and Fourth AP Fund, which manage money in Sweden’s state pension system.

Telia has decided to propose an additional dividend of 0.65 SEK/share, bringing the total dividend for 2019 back to the 2.45 SEK/share originally proposed in January. The company revised its proposal in March, due to the effects of the pandemic.