Welcome!

Mobile IoT Authors: Jamie Maidson, Karyn Jeffery, Elizabeth White, Scott Allen, Liz McMillan

News Feed Item

VimpelCom And Global Telecom Holding Announce A Strategic Partnership With The Algerian Fonds National d'Investissement And A Successful Resolution In Algeria

AMSTERDAM and CAIRO, April 18, 2014 /PRNewswire/ -- VimpelCom Ltd ("VimpelCom") (NASDAQ: VIP) and Global Telecom Holding S.A.E. ("GTH") (EGX: GTHE, LSE: GLTD) today announce the signing of a share purchase agreement (the "Share Purchase Agreement") for the sale by GTH of a 51% interest in Orascom Telecom Algerie SpA ("OTA" or "Djezzy") to the Fonds National d'Investissement (the "FNI"), the Algerian National Investment Fund, for a purchase consideration of USD 2.643 billion.

OTA will distribute a dividend of USD 1.862 billion to GTH immediately prior to the closing of the transaction ("Closing"), which is expected to occur by the end of 2014.

The total dividends and proceeds due to GTH at Closing are expected to amount to USD 4.0 billion, net of all taxes and after the settlement of all outstanding disputes between the parties and the payment of associated fines. All proceeds will be used to pay down the outstanding shareholder loans provided by VimpelCom to GTH.

GTH and the FNI will enter into a shareholders agreement ("the Shareholders Agreement"), effective as of Closing, which will govern their relationship as shareholders in OTA going forward. GTH will continue to exercise operational control over OTA and, as a result, both GTH and VimpelCom will continue to fully consolidate OTA. This partnership with the FNI provides OTA with a strong and stable shareholder structure on which to build and strengthen its operations in Algeria.

Jo Lunder, Chief Executive Officer of VimpelCom, commented: "This favorable long-term agreement and settlement represents a successful outcome for all stakeholders. For VimpelCom and GTH, this value accretive transaction releases USD 4.0 billion in cash proceeds to pay down gross debt. For GTH and Djezzy, it resolves our dispute in Algeria and allows us to solidify our strong leadership position in Algeria by enabling us to further invest in a high speed 3G network to take full advantage of the potential for mobile data growth in the country. We look forward to working with our new partner, the Algerian National Investment Fund, to drive the business forward and to create significant long-term value for all of our stakeholders in line with our strategic Value Agenda."

The terms of the Share Purchase Agreement and the Shareholders Agreement have been approved by the Algerian Conseil des Participations de l'Etat, the Conseil de Direction of the FNI, the VimpelCom Supervisory Board and the Global Telecom Holding Board of Directors.

Prior to Closing and in order to facilitate the Closing OTA will contribute its operations (the "Contribution") to Optimum Telecom Algerie S.p.A. ("Optimum"), a wholly-owned subsidiary of OTA. In addition, at or prior to closing, Optimum intends to establish a credit facility with a syndicate of local banks in an amount of up to 82 billion dinars (approximately USD 1.0 billion).

Shareholders Agreement

GTH and the FNI along with VimpelCom, OTA and Optimum will enter into the Shareholders Agreement at Closing to govern the relationship of GTH and the FNI as shareholders and partners in OTA and the operations of Optimum.

Pursuant to the Shareholders Agreement, GTH and VimpelCom will continue to fully consolidate OTA. GTH will retain operational control over each of OTA and Optimum with certain enumerated strategic decisions being subject to a supermajority vote of the respective boards (including the affirmative vote of at least one director representing GTH and the FNI). OTA will pay future dividends to its shareholders out of available free cash flow, targeting a pay-out ratio of not less than 42.5% of consolidated net income.

Transfers of the parties' respective shareholdings in OTA are not permitted during the first 7 years following the Closing other than to certain affiliates. Each of GTH and the FNI will have a put option and call option, respectively, at fair market value on GTH's OTA shares on the 7th anniversary of Closing, as well as upon the occurrence of certain specific events.

Settlement of Disputes

The foreign exchange and import restrictions put in place by the Bank of Algeria against OTA on April 15, 2010 will be lifted on Closing, following the payment by OTA to the Algerian Treasury of the fine of 99 billion Algerian dinars (equivalent to approximately USD 1.3 billion). At Closing, OTA will definitively discontinue (with no admission of wrongdoing or liability) all pending related proceedings.

At Closing, OTA will definitively discontinue (with no admission of wrongdoing or liability) all pending proceedings relating to the disputes with the Algerian tax administration relating to tax reassessments for the years 2004 to 2009. OTA will write off in its accounts the related tax receivable in its balance sheet.

As a result of the settlement of these disputes, both GTH and VimpelCom will take a one-off charge of USD 2.0 billion in their 2013 Financial Statements.

Upon signing of the Share Purchase Agreement, GTH suspended its current arbitration against the Algerian State initiated on April 12, 2012 and, upon Closing, the parties to the arbitration will settle the arbitration and all claims relating thereto.

Agreement with OTA's minority shareholder Cevital

In addition, Cevital S.p.A. ("Cevital"), which holds just over 3% of OTA shares, has signed a Framework Agreement with GTH under which the existing OTA shareholder arrangements will be terminated and GTH will acquire Cevital's OTA shares. In exchange for a purchase consideration of USD 178 million (equivalent to the implied price at which the FNI is acquiring its 51% stake) and the right to USD 56 million from OTA's pre-Closing dividend, GTH will transfer to Cevital the shares of a wholly-owned subsidiary which will hold five year convertible bonds issued by VimpelCom in the principal amount of USD 234 million. The VimpelCom bonds will pay interest at an annual rate of 3.75% and will be convertible into VimpelCom ADSs at a conversion price equal to a premium of 40% above the prevailing ADS price at the time of issue.

As part of the Cevital transaction, GTH will grant Cevital a right to purchase 3.43% of OTA shares for a fixed amount of USD 178 million. Such right may be exercised on the 5th anniversary of Closing (as well as upon the occurrence of certain specific events prior to that time) or at any time between the 5th and 7th anniversaries of Closing. The Cevital transaction is conditional upon negotiation and execution of definitive documentation, receipt of requisite governmental approvals and on Closing of the transaction with the FNI. VimpelCom will guarantee the obligations of GTH in the Cevital transaction. In case the Closing does not take place, GTH and Cevital have also agreed in principle to negotiate agreements under which GTH will pay Cevital 3.43% of the net amount, if any, collected by GTH in the arbitration against the Algerian State in exchange for Cevital transferring all of its OTA shares to GTH and terminating the current OTA shareholder arrangements.

Closing

The conditions precedent to Closing include, amongst others, the completion of the Contribution, Optimum obtaining the credit facility of up to 82 billion Algerian dinars (equivalent to approximately USD 1.0 billion), the payment of the pre-Closing dividend of USD 1.862 billion to GTH, the irrevocable termination of the existing shareholders agreement entered into with Cevital, the receipt of necessary approvals by the shareholders of GTH and the receipt of necessary regulatory approvals by the Algerian authorities. The parties expect Closing to occur by the end of 2014.

Disclaimer

This announcement contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts, and include statements regarding the possible transactions described above and the expected benefits of such transactions. Any statement in this announcement that expresses or implies VimpelCom's or GTH's intentions, beliefs, expectations or predictions (and the assumptions underlying them) is a forward-looking statement. Forward-looking statements involve inherent risks, uncertainties and assumptions, including, without limitation, the possibility that the transactions may not materialize as expected or at all. If such risks or uncertainties materialize or such assumptions prove incorrect, actual results could differ materially from those expressed or implied by such forward-looking statements and assumptions. Certain other risks that could cause actual results to differ materially from those discussed in any forward-looking statements include the risk factors described in VimpelCom's Annual Report on Form 20-F for the year ended December 31, 2012, and other public filings made by the VimpelCom with the U.S. Securities and Exchange Commission, which risk factors are incorporated herein by reference. The forward-looking statements contained in this announcement are made as of the date hereof, and VimpelCom and GTH expressly disclaim any obligation to update or correct any forward-looking statements made herein due to the occurrence of events after the issuance of this announcement.

About VimpelCom
VimpelCom is one of the world's largest integrated telecommunications services operators providing voice and data services through a range of traditional and broadband mobile and fixed technologies in Russia, Italy, Ukraine, Kazakhstan, Uzbekistan, Tajikistan, Armenia, Georgia, Kyrgyzstan, Laos, Algeria, Bangladesh, Pakistan, Burundi, Zimbabwe, Central African Republic and Canada. VimpelCom's operations around the globe cover territory with a total population of approximately 753 million people. As of December 31, 2013 VimpelCom had 220 million mobile customers. VimpelCom Ltd. is headquartered in Amsterdam, the Netherlands and listed as an ADS on the NASDAQ Global Stock Market under the symbol "VIP".

About Global Telecom Holding
GTH, which is 51.9% owned by VimpelCom, is a leading international telecommunications company operating mobile networks in high growth markets in the Middle East, Africa and Asia and North America, having a total population under license of approximately 459 million with an average mobile telephony penetration of approximately 57% as of December 31, 2013. GTH operates mobile networks in Algeria ("OTA"), Pakistan ("Mobilink"), and Bangladesh ("banglalink"), and has an indirect equity shareholding in Globalive Wireless Canada ("WIND Mobile"). In addition it has an indirect equity ownership in Telecel Zimbabwe (Zimbabwe) and through its subsidiary Telecel Globe. GTH also operates in Burundi and the Central African Republic. GTH reached more than 89 million customers as of December 31, 2013. GTH is traded on the Egyptian Exchange under the symbol (GTHE.CA), and on the London Stock Exchange, its GDRs are traded under the symbol (GLTD:LI).

About Orascom Telecom Algerie (Djezzy)
Djezzy operates a mobile network in Algeria and provides a range of prepaid and postpaid products encompassing voice, data and multimedia. In 2013, Djezzy recorded USD 1.796 billion of revenue and USD 1.054 billion of EBITDA. As of December 31, 2013, Djezzy's network served 17.6 million customers, representing a market share of approximately 53% of total mobile customers in Algeria.

SOURCE VimpelCom Ltd.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
SYS-CON Events announced today that MangoApps will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MangoApps provides modern company intranets and team collaboration software, allowing workers to stay connected and productive from anywhere in the world and from any device. For more information, please visit https://www.mangoapps.com/.
SYS-CON Events announced today that EastBanc Technologies will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. EastBanc Technologies has been working at the frontier of technology since 1999. Today, the firm provides full-lifecycle software development delivering flexible technology solutions that seamlessly integrate with existing systems – whether on premise or cloud. EastBanc Technologies partners with p...
In his session at 18th Cloud Expo, Bruce Swann, Senior Product Marketing Manager at Adobe, will discuss how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects). Bruce Swann has more than 15 years of experience working with digital marketing disciplines like web analytics, social med...
SYS-CON Events announced today that ContentMX, the marketing technology and services company with a singular mission to increase engagement and drive more conversations for enterprise, channel and SMB technology marketers, has been named “Sponsor & Exhibitor Lounge Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, New York. “CloudExpo is a great opportunity to start a conversation with new prospects, but what happens after the...
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, will discuss the importance of WebRTC and how it enables companies to fo...
SYS-CON Events announced today Object Management Group® has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
The IoT is changing the way enterprises conduct business. In his session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, discuss how businesses can gain an edge over competitors by empowering consumers to take control through IoT. We'll cite examples such as a Washington, D.C.-based sports club that leveraged IoT and the cloud to develop a comprehensive booking system. He'll also highlight how IoT can revitalize and restore outdated business models, making them profitable...
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
Customer experience has become a competitive differentiator for companies, and it’s imperative that brands seamlessly connect the customer journey across all platforms. With the continued explosion of IoT, join us for a look at how to build a winning digital foundation in the connected era – today and in the future. In his session at @ThingsExpo, Chris Nguyen, Group Product Marketing Manager at Adobe, will discuss how to successfully leverage mobile, rapidly deploy content, capture real-time d...
What a difference a year makes. Organizations aren’t just talking about IoT possibilities, it is now baked into their core business strategy. With IoT, billions of devices generating data from different companies on different networks around the globe need to interact. From efficiency to better customer insights to completely new business models, IoT will turn traditional business models upside down. In the new customer-centric age, the key to success is delivering critical services and apps wit...
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...
SYS-CON Events announced today that BMC Software has been named "Siver Sponsor" of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. BMC is a global leader in innovative software solutions that help businesses transform into digital enterprises for the ultimate competitive advantage. BMC Digital Enterprise Management is a set of innovative IT solutions designed to make digital business fast, seamless, and optimized from mainframe to mo...
SYS-CON Events announced today that MobiDev will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex software systems for startups and enterprises. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobile software company with over 200 develope...
SoftLayer operates a global cloud infrastructure platform built for Internet scale. With a global footprint of data centers and network points of presence, SoftLayer provides infrastructure as a service to leading-edge customers ranging from Web startups to global enterprises. SoftLayer's modular architecture, full-featured API, and sophisticated automation provide unparalleled performance and control. Its flexible unified platform seamlessly spans physical and virtual devices linked via a world...
SYS-CON Events announced today that Alert Logic, Inc., the leading provider of Security-as-a-Service solutions for the cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Alert Logic, Inc., provides Security-as-a-Service for on-premises, cloud, and hybrid infrastructures, delivering deep security insight and continuous protection for customers at a lower cost than traditional security solutions. Ful...
Companies can harness IoT and predictive analytics to sustain business continuity; predict and manage site performance during emergencies; minimize expensive reactive maintenance; and forecast equipment and maintenance budgets and expenditures. Providing cost-effective, uninterrupted service is challenging, particularly for organizations with geographically dispersed operations.
As cloud and storage projections continue to rise, the number of organizations moving to the cloud is escalating and it is clear cloud storage is here to stay. However, is it secure? Data is the lifeblood for government entities, countries, cloud service providers and enterprises alike and losing or exposing that data can have disastrous results. There are new concepts for data storage on the horizon that will deliver secure solutions for storing and moving sensitive data around the world. ...
SYS-CON Events announced today TechTarget has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. TechTarget is the Web’s leading destination for serious technology buyers researching and making enterprise technology decisions. Its extensive global networ...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...