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Roman Abramovich-backed British telecoms, Truphone, sold for £1

Truphone, whose 23% stake is held by Roman Abramovich, has been sold for £1 to Hakan Koç, a German businessman who co-founded a used car business called Auto1, and Pyrros Koussios, a former telco exec and private equity investor. The company faced uncertainty after Abramovich had sanctions imposed by UK and European authorities. Koç will own 90% of the firm and Koussios the other 10%.

Truphone specializes in selling eSIMs, which are used by Apple and many mobile network operators. With 400 direct network agreements in place, the company has 450 employees and coverage across 200 countries. The telecoms company was valued at £410mn in 2020 and Abramovich, along with his two Russian partners, had invested more than £300mn. The company has recorded 15 consecutive years of losses, including £16mn in 2020, and also sells contracts to businesses including banks that want a secure network and to avoid roaming charges.

The company’s future was put into jeopardy after Abramovich faced sanctions following the Russian invasion of Ukraine due to his ties to the Kremlin. Last summer, the Russian multi-billion was also forced to sell Chelsea Football Club for an estimated £4.25bn ($5.2bn). Its assets have been fully acquired by TP Global Operations Ltd., a recently formed entity owned entirely by Koç and Koussios. The two investors have committed to invest up to £15mn in the next few years. They aim to expand Truphone by providing banks with compliance solutions for recording phone and text messages as well as its eSIM technology.

On one hand, the long period of Truphone’s uncertainty since last April after Abramovich’s sanction might extend due to its unprofitability. A certain amount of cash will need to be invested continually to make the firm sustainable. On the other hand, the change in ownership might add value to the company itself. This is due to the fact that some clients have just been looking for initiatives from the new owners of the business.

Written by: Quynh Chi Le

Sources: Financial Times, Data Center Dynamics

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