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Mon 17 Jan 2011 02:09 PM

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Sawiris welcomes, signs revised Vimpelcom deal

Vimpelcom approves deal for Italy's Wind, 51% Orascom; six directors vote in favour

Sawiris welcomes, signs revised Vimpelcom deal
TELCO DEAL Under the new terms Vimpelcom will issue 325.6 million new common shares and 305 million new convertible preferred shares and pay $1.495bn to Sawiris for 51.7% of Orascom Telecom and 100% of Italys Wind (Bloomberg Images)

Egyptian billionaire Naguib Sawiris, executive chairman of Wind Telecom, said on Monday he welcomed the Vimpelcom board's approval of revised terms for a merger, and would give up board representation rights.

"We agreed to sacrifice our board representation rights to convince Telenor to support this transaction," Sawiris said in an emailed statement, adding that Wind had signed amended deal documents.

The "continuing non-alignment" of Vimpelcom's key shareholders regarding the deal was "unfortunate," he added.

Vimpelcom said on Monday its supervisory board gave final approval to a revised bid for Sawiris' telecoms assets in spite of continued opposition from key shareholder Telenor.

Vimpelcom said in a statement that six directors - three nominated by Russia's Altimo and three independents - voted in favour of the transaction. The three Telenor-nominated directors voted against.

Under the new terms Vimpelcom will issue 325.6 million new common shares and 305 million new convertible preferred shares and pay $1.495bn to Sawiris for 51.7 percent of Orascom Telecom and 100 percent of Italy's Wind.

It will also share any financial losses or gains with Sawiris related to a possible nationalisation of Orascom's lucrative Algerian asset Djezzy.

The initial bid was modified after Norway's Telenor opposed the deal at a December board meeting.

Vimpelcom had originally planned to issue 325.6 million new common shares and pay $1.8bn to Sawiris in a deal worth $6.6bn.

The company said a shareholders' agreement struck between Altimo and Telenor in 2009 after years of corporate battles in 2009 would not be changed as the result of the deal.

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Tamer Tymourlank 9 years ago

Good for them. Telenor had been a thorn in the side of this deal because of their fear that this deal would end up like their own investments in Asia, and they would end up suffering yet again. I am glad to see Russain based companies venturing out into the world with their money and experience. I wish the Chinese (other than PCCW) telecom operators would do the same - its time for some competition in this region, services here are so bad there is no reason to compare between adversaries.

Telcoguy 9 years ago

You may wonder why Telenor is much more risk averse... you talk of 'money and experience'. Guess what Telenor has much more of the second than Vimpelcom... and if my own experience is any good at the end of this venture Vimpelcom will have much lees from the first and maybe a little bit more from the second.
Enjoy the ride.