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Mobilink parent Company ORASCOM Teleocm Hands up from Cellular Industry & Handed over the major share to Vimpelcom

Mobilink parent Company ORASCOM Teleocm Hands up from Cellular Industry & Handed over the major share to Vimpelcom

Mobilink parent Company ORASCOM Teleocm Hands up from Cellular Industry & Handed over the major share to Vimpelcom
Russia’s VimpelCom and Egypt based Weather Investments have finally confirmed long-running rumours and announced a merger that should create the world’s fifth largest mobile telecommunications carrier by subscribers, with pro forma net operating revenues of US$21.5 billion and pro forma EBITDA of US$9.5 billion.
Under the terms of the deal, VimpelCom will own – through Weather – 51.7% of Orascom Telecom Holding and 100% of Wind Italy. Under the terms of the Transaction, Weather shareholders, largely Naguib Sawiris, will contribute to VimpelCom their shares in Weather in exchange for a consideration consisting of newly issued VimpelCom common shares, US$1.8 billion in cash and certain assets that will be demerged from Orascom Telecom and from Wind Italy.

Orascom Telecom’s investments in Egypt and North Korea, will be transferred to the current Weather shareholders and wont be part of the deal. Wind Hellas Telecommunications in Greece is entirely excluded from the transaction.
The VimpelCom shares issued to Weather shareholders at the closing of the Transaction will represent a 20% economic interest and a 18.5% voting interest in the enlarged VimpelCom group.
The deal is valued at around US$6.8 billion in stock and cash.
Upon issuance of the new VimpelCom shares, Telenor and Altimo will hold 31.7% and 31.4% of the economic rights and 29.3% and 36.4% of the voting rights, respectively, of VimpelCom. Minority shareholders in VimpelCom will represent 17% of the economic rights and 15.7% of the voting rights.
It is intended that Weather will designate two members to an enlarged VimpelCom board of eleven members, while Telenor and Altimo will each continue to designate three board members. Three board members will continue to be unaffiliated with any major shareholder.
Naguib Sawiris, the Chairman of Weather, commented: “This landmark transaction is a true reflection of the high quality of our Orascom Telecom and Wind Italy assets and of the significant value that we have created over the years for our shareholders. We share a common vision with our new partners at VimpelCom of the exciting prospects of our new, enlarged and diversified telecoms platform. Moreover, I am confident that our minority shareholders in Orascom Telecom will benefit from the synergies created by the combination of the two entities, especially in the area of procurement, and by the overall strengthening and de-risking of the Orascom Telecom balance sheet. I am looking forward to being fully involved in the new group and to joining VimpelCom’s Supervisory Board.”
Following the deal, VimpelCom’s revenue base will be significantly diversified. Based on 2009 pro forma revenues, the existing operations in Russia will represent 35% and Wind Italy will represent 34% of the combined company. The group will also have an attractive mix of developed and emerging market assets in Eastern Europe, Asia and Africa.
There is significant potential for value creation from synergies between VimpelCom and Weather’s operations, with an estimated net present value of US$2.5 billion. These synergies will be primarily derived from procurement opex and capex.

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