Kyivstar shares fall on VEON's discounted $131M secondary offering
VEON Amsterdam B.V. selling 12.5 million shares at 12.9% discount while maintaining majority stake in Ukrainian telecom operator
Kyivstar Group shares declined after parent company VEON Amsterdam B.V. announced a secondary offering priced at a 12.9% discount to the company's market value, marking the first significant equity sale since the Ukrainian telecom operator began trading on Nasdaq last year.
The offering places 12.5 million common shares at $10.50 each, raising approximately $131.3 million for VEON and other selling shareholders. The price represents a substantial reduction from Kyivstar's closing price of $12.05 on January 30, with underwriters granted a 30-day option to purchase an additional 1.875 million shares. The transaction is expected to close on February 2.
VEON's move to reduce its stake comes despite Kyivstar's strong operational performance. The company recently reported preliminary 2025 results projecting 24% to 26% year-over-year revenue growth and adjusted EBITDA growth in U.S. dollar terms. The telecom operator has demonstrated remarkable resilience throughout the ongoing conflict in Ukraine, maintaining its position as the country's leading digital operator with nearly 23 million mobile subscribers and 1.1 million fixed connectivity customers.
"This secondary offering provides liquidity to VEON while allowing the company to maintain a controlling stake," the announcement stated. As of September 2025, VEON held approximately 89.6% of Kyivstar shares and is expected to retain more than 80% ownership following the sale. Kyivstar itself is not issuing any shares in the offering and will not receive any proceeds from the transaction.
The offering represents a significant moment for Kyivstar, which became the first pure-play Ukrainian company to list on U.S. markets when it began trading on Nasdaq under the ticker KYIV in August 2025. The listing was completed through a merger with Cohen Circle Acquisition Corp, valuing the company at approximately $3 billion.
Despite the discounted offering price, analysts maintain a generally positive outlook on Kyivstar. Six analysts have issued buy ratings on the stock with an average target price of $17.24, according to market data. The company currently trades at a forward price-to-earnings ratio of 9.68, which some analysts consider attractive given its growth trajectory and dominant market position.
Kyivstar's valuation reflects what analysts describe as a "Growth at a Reasonable Price" opportunity, though the company's shares trade at multiples typically associated with distressed businesses due to geopolitical risks. The telecom operator's forward P/E of 9.14 and enterprise value to EBITDA ratio of 5.06 stand near the lower end of its historical range, suggesting the market is pricing in substantial risk despite the company's strong fundamentals.
The Ukrainian telecom market remains a growth story, with the sector valued at $1.89 billion in 2025 and projected to reach $1.96 billion in 2026, representing a compound annual growth rate of 3.48% from 2026 to 2031. Kyivstar's management has set ambitious targets for 2025, aiming for 20-23% USD-based revenue growth and 19-22% EBITDA growth, driven by digital expansion and cross-selling initiatives.
The company continues to invest heavily in infrastructure despite the challenging operating environment. Kyivstar has committed to investing $1 billion in Ukraine between 2023 and 2027 for infrastructure and technological development. Recent initiatives include expanding satellite connectivity services, which have attracted over 3 million users to its Starlink-powered services, and launching a 5G test zone in Lviv.
VEON's strategy of gradually reducing its Kyivstar stake while maintaining majority control aligns with its broader corporate objectives. The parent company anticipates exceeding its 2025 outlook following Kyivstar's preliminary strong results, highlighting the subsidiary's importance to VEON's overall performance.
The secondary offering comes at a time when investors are increasingly looking at opportunities in Ukraine's reconstruction and digitalization efforts. However, the significant discount in the offering price underscores the ongoing challenges of attracting investment in a country still grappling with the impacts of war.