The shareholders of Egypt’s Orascom Telecom Holding (OTH) have approved accounting changes paving the way for the demerger of the company.
On 14 April, OTH’s shareholders initially approved the demerger of the company into OTH on the one hand, and…
The shareholders of Egypt’s Orascom Telecom Holding (OTH) have approved accounting changes paving the way for the demerger of the company.
On 14 April, OTH’s shareholders initially approved the demerger of the company into OTH on the one hand, and Orascom Telecom Media and Technology Holding (OTMT) on the other hand as a result of the merger between OTH’s parent company Wind Telecom with Vimpelcom.
But a number of OTH minority shareholders took legal action requesting that the Egyptian Financial Supervisory Authority (EFSA) investigate the demerger. As part of its verifications, EFSA asked that the General Authority for Investment (GAFI) review some accounting documents that would serve as a basis of the planned demerger. In its report, GAFI introduced adjustments to the demerger accounts of 30 September 2010, including changes with respect to the balance sheet split between OTH and OTMT to be used as the basis for the demerger.
The demerger will result in OTH shareholders having the same shareholding interest in OTMT as they hold in OTH. Wind Telecom’s 51.7% indirect stake in OTMT will be transferred to Sawiris-controlled Weather Investments II.
OTMT will hold OTH’s interests in Mobinil Telecommunications, Egyptian Company for Mobile Services (ECSM), North Korean GSM operator Koryolink, Orascom Telecom Ventures (formerly Intouch Communication Services) as well as other media and technology investments, including undersea cable assets.
The shareholders also authorised OTH chairman to change the internal ownership structure of the company’s stakes in Mobinil Telecommunications and ECMS to be transferred to OTMT. This concerns the transfer of shares owned by OTH in Mobinil Telecommunications and ECMS to a company fully owned by OTH, in which a Sawiris family company will own the majority of the voting rights. The aim is to preserve temporarily the Sawiris family’s control over the assets until the completion of the merger.
The company said that the resolutions were approved by 99.99% of the 60.9% of the company’s voting shares that participated in the EGM.
