Canada’s industry ministry has endorsed a management buyout of Wind Mobile led by chairman and co-founder Anthony Lacavera which will see Russia-focused VimpelCom sell its stake and exit the country.
Lacavera and his investment partners committed to…
Canada’s industry ministry has endorsed a management buyout of Wind Mobile led by chairman and co-founder Anthony Lacavera which will see Russia-focused VimpelCom sell its stake and exit the country.
Lacavera and his investment partners committed to “significantly invest capital with the aim of purchasing spectrum and growing Wind Mobile’s business across Canada” to win regulatory approval, Industry Canada said in a statement.
Globalive Capital, the investment group led by Lacavera, as well as West Face Capital, Tennenbaum Capital Partners, LG Capital Investors, Novus Wireless Communications and Serruya Private Equity are buying VimpelCom’s majority equity/minority voting stake for C$135m (US$122.4m).
The syndicate is also acquiring C$160m (US$145m) of outstanding vendor financing debt.
The buyout is structured so that Globalive acquires VimpelCom’s shares and then transfers Wind to AAL Acquisitions, a consortium containing the Canadian and US funds and Globalive. AAL has not disclosed the breakdown of its shareholder structure.
After the deal was announced in mid-September, Lacavera vacated the CEO position but he remains Wind’s chairman. The operator has promoted Pietro Cordova, who had been its COO since July 2012, to the role.
Globalive currently owns an indirect 66.7% voting interest and 34.3% equity interest in Wind, while the rest is held indirectly by Amsterdam-based VimpelCom, which is the operator’s principal financial backer.
The complex ownership structure was drawn up to bypass Canada’s strict foreign investment rules in the telecoms sector.
These rules were relaxed in 2012 and VimpelCom had looked to become the first company to take advantage of the new legislation allowing foreign investors to hold 100% of telcos with 10% market share or less.
In January 2013, VimpelCom agreed to buy Lacavera out of the business, but abandoned the deal six months later following discussions with the Canadian government, which was rumoured to be uncomfortable with the deal.
A report at the time suggested the takeover was being delayed due to security concerns. Canadian officials were reportedly concerned about Wind’s network, built by China’s Huawei, being controlled by a partly Russian-owned company. Wind, Huawei and VimpelCom all dismissed the gist of the report at the time. It was also said in the local press that VimpelCom was pursuing the acquisition to give it control of its own destiny in Canada, and that it planned to sell Wind later on.
Following the collapse of the takeover, VimpelCom elected to stop funding Wind, pulling it out of Canada’s 700 MHz spectrum auction at the start of this year.
Wind is Canada’s fourth-largest mobile player by customers but its subscriber base is less than 800,000, far behind the country’s big three operators which all have at least seven million clients.
