Shah Capital, a long-term investor with a seven percent stake in telecoms company Veon, has criticized the company's current strategy, claiming that its share price is 80 percent lower than it should have been over the last decade. In an open letter to Veon's board of directors, Himanshu H Shah, founder of Shah Capital, said that the company can improve its current share price on the Nasdaq of $29.50 to $160 per share by 2026, if the company makes a number of changes.
“Veon’s share price continues to languish at ~2.5X EV/EBITDA valuation even with a deleveraged pristine balance sheet, strong recent operating growth metrics and impressive operating outlook as was presented by management on Veon Investor Day in June ’24.” Shah suggests that Veon should look to monetize some of its assets, such as its telecom towers, of which its current portfolio stands at around 30,000.
“With an unlevered balance sheet and asset-rich portfolio of around 30,000 towers and meaningful other assets that can be monetized, Veon should trade at [a] substantially higher valuation compared to its emerging market telecom peers like Airtel Africa, Millicom, and America Movil which are trading at [a] median valuation of about five times their earnings before interest, taxes, depreciation, and amortization (EBITDA).”
