VimpelCom Ltd closed on Friday its merger with Wind Telecom, the telecoms vehicle of Egyptian businessman Naguib Sawiris, becoming the world’s sixth largest mobile operator in number of subscribers.
As a result of the transaction, VimpelCom now owns…
VimpelCom Ltd closed on Friday its merger with Wind Telecom, the telecoms vehicle of Egyptian businessman Naguib Sawiris, becoming the world’s sixth largest mobile operator in number of subscribers.
As a result of the transaction, VimpelCom now owns 51.7% of Egypt-based Orascom Telecom Holding and 100% of Wind Italy. The new entity combines over 180 million subscribers in 20 countries.
Former Wind Telecom shareholders received 325,639,827 newly-issued VimpelCom common shares, 305 million newly-issued VimpelCom convertible preferred shares, and US$1.495bn in cash from existing cash balances and new debt facilities.
Part of Orascom Telecom Holding is being refinanced via an inter-company loan from VimpelCom. But all of Orascom Telecom’s subsidiary debt remains in place.
Following the closing of the merger, Altimo said it would trigger the termination of the current shareholder agreement with Telenor in order to ensure proportional rights for all minority shareholders and to avoid conflicts between major shareholders.
Altimo said in a release: “With the closing of the Wind transaction, which has made the Sawiris family a shareholder with a 30.6% voting interest and 20.0% economic interest in VimpelCom, there are three major shareholders with approximately equal stakes in the Company.
“In light of these developments, Altimo believes that the current Shareholders’ Agreement is no longer appropriate, and that efficient corporate governance will be delivered by more standard governance arrangements.”
Despite Algeria’s firm intention to nationalise Orascom’s mobile unit Djezzy, VimpelCom said it would seek a resolution with the Algerian government to retain the operator.
Wind Telecom’s interests to be demerged mainly comprise Orascom Telecom’s investments in Egypt and North Korea as well as Wind Italy’s International Services SpA unit and other smaller assets.
Under VimpelCom’s new corporate structure there will be five key business units: Europe and North America (including Italy and Canada); Russia; Ukraine; CIS; Africa and Asia (including South East Asia).
Khaled Bichara, former group CEO of Wind Telecom, has been appointed president and COO. He will be responsible for the company’s business units as well as the commercial and technology functions.
These functions, which will be led by a chief technology officer and a chief commercial officer, will execute the company’s synergy roadmap and work on reaching the targets for technology procurement and commercial development.
Alexander Izosimov remains CEO of VimpelCom and Henk van Dalen stays CFO.
Jeff McGhie is group general council, while Anja Uitdehaag is group human resources director. A group regulatory affairs director will also be appointed.
Izosimov said: “The closing of this large and complex transaction opens the door for new and exciting growth opportunities, positioning the Company to capitalize on strong growth in emerging markets, industry consolidation, and the rapid development of mobile data.
“VimpelCom has already commenced integration initiatives and we are focused on realizing synergies, particularly in the area of procurement, and capitalizing on the Company’s strengthened leadership, scale and market expertise. Furthermore, we look forward to delivering on our commitment to strengthening our financial position through rapid debt paydown and to driving sustained growth in our business.”
The shareholders of VimpelCom Ltd approved the merger on 17 March. Earlier this year, Telenor launched arbitration proceedings in London to secure the pre-emptive rights it said it was deprived of as a result of the Wind transaction.
Vimpelcom was being advised by Akin Gump Strauss Hauer & Feld, Deutsche Bank and UBS.
Wind Telecom had EFG Hermes and Lazard as M&A advisers, while its legal advisers were Cleary Gottlieb Steen & Hamilton and Ibrachy Law Firm.
Citigroup was the financial adviser and also provided a fairness opinion to Vimpelcom’s supervisory board.
