According to three people familiar with the thinking of the Myanmar government, the Myanmar military government was dissatisfied with Telenor’s proposal to sell its operations in the country to Lebanon’s M1 group, which forced the Norwegian telecommunications company to find other buyers.
Although the military-controlled Ministry of Telecommunications has not publicly ruled out a proposal to sell $105 million to M1, people familiar with the matter told the Financial Times that the regime wants Telenor to be sold to a Myanmar-controlled company. Some local telecommunications and other companies have expressed interest.
“Everyone knows them [the military] They have decided to refuse the sale, but they have not announced it yet,” an industry executive said, due to the sensitivity of the transaction and the business environment in Myanmar, he asked not to be named. “Telenor knows this and is carefully considering alternatives. “
The company, which is 54% owned by the Norwegian government, said in response to a question about whether to consider alternative buyers: “Telenor is still awaiting an official response from the Myanmar authorities.”
M1 stated that it would not comment “except to confirm that the process is still ongoing.”
After the military coup in February, Telenor was under increasing pressure from human rights organizations due to long-term efforts to withdraw from Myanmar, which made its position increasingly untenable.
The company wrote off all of its US$782 million investment in the country in May. In July, it announced the sale of its local assets to M1, founded by Lebanese Prime Minister Najib Mikati and his brother Taha Mikati.
Sigve Brekke, Telenor’s chief executive, told the Financial Times in July that it faces conflicts over how to operate in the country. [a] Military dictatorship without jeopardizing our values”.
The Burmese regime killed or imprisoned thousands of people and forced telecommunications companies to restrict Internet services, pressure employees and require them to install interception equipment-a move that Telenor said helped spur its decision to leave.
However, civil society groups in Myanmar believe that Telenor has “irresponsibly left” the country and failed to conduct due diligence or mitigate the potential negative human rights impact of its decision to sell its business to M1.
In recent weeks, as news of the military government’s plan to cancel the deal has become more apparent, some local investors have contacted Telenor. “The crux of the problem is that the government is uncomfortable with M1 becoming a major shareholder,” said a person familiar with the regime’s thinking.
A person familiar with the matter said that Yoma Group, a banking and other consumer industry conglomerate in which Myanmar tycoon Serge Pun holds a majority stake, may be interested in equity.
Yoma is Telenor’s partner in Wave Money, an e-wallet service, and the Myanmar company has been seeking to increase its shares.
Yoma declined to comment, saying only that it remains “committed to Myanmar and continues to invest in the country”, adding: “We have always been a friendly partner of Telenor and continue to explore increasing investment in the Wave Money joint venture.”
Zaw Min Tun, a spokesman for the Myanmar military government, did not respond to a request for comment.
Additional reporting by Chloe Cornish in Beirut