Sanctions sale sees owner sell for Poundshop price
Truphone, a UK-based mobile virtual network operator once valued at £400 million, is being sold is being sold to two European tech entrepreneurs for a pound (£1), The Times reported. According to Business Insider, SIM-seller Truphone was valued at $512 million (£410 million) in 2020 and received almost $375 million of investment from Russian Oligarch Roman Abramovich and two business partners, Alexander Abramov and Alexander Frolov. Abramovich owns 23% of the company, says The Times, and following sanctions on him, the former owner of Chelsea FC is under pressure to offload assets.
Rivals concerned
Truphone hired the advisory firm FRP in April to review its “strategic options”. Hakan Koc is one of the two entrepreneurs who has emerged as one of the preferred bidders for Truphone. However, rivals are concerned about Koc’s links to Frolov as his used car marketplace Auto1 has received funds from a firm run by Frolov’s son. Koc would own 90% of Truphone while his business associate, a former telecom executive and private equity investor, Pyrros Koussios, would own 10% of the company, the Financial Times reported.
Deal finalised
The $5.3 billion deal was finalised last month to a group led by LA Dodgers co-owner Todd Boehly and the investment firm Clearlake. Abramovich had to sell Chelsea FC, among other assets, after being hit by western sanctions amid Russia’s invasion of Ukraine. Abramovich once had an estimated $14 billion, but his wealth was halved by western sanctions, says Forbes. The current owners of Truphone have committed to invest €12 million and will take on certain contractual obligations. There are outstanding one-off payments and debts, including a $660,000 fine from the Federal Communications Commission linked to the company’s misrepresentation of ownership. The existing owners would receive up to a third of the original funds invested, The Times reported. However, Abramovich will not receive the funds while he remains subject sanctions.