VimpelCom, one of Russia's three top mobile operators, has signed a $6.6 billion merger agreement with Weather Investments S.p.A., belonging to Egyptian tycoon Naguib Sawiris to create the world's fifth telecommunications carrier, VimpelCom said.
After the deal is completed, VimpelCom will own, through Weather, 51.7 percent of Orascom Telecom Holding S.A.E., which provides services in Africa, Asia and Canada, and 100 percent of Wind Telecomunicazioni S.p.A., which works in Italy, VimpelCom said.
The combined firm will operate in 20 countries in Europe, Asia, Africa and North America with about 850 million people living within the coverage area.
Weather shareholders will swap their shares for 325.64 million newly issued VimpelCom shares, $1.8 billion in cash and some assets that will be demerged from Orascom Telecom and Wind Italy, the company said.
VimpelCom said that $1.8 billion will be financed from existing cash balances and new debt facilities. VimpelCom and Weather expect to launch the required financing process in October or November.
Part of Orascom Telecom's debt will be financed via an inter-company loan from VimpelCom.
VimpelCom shares issued to Weather shareholders will represent a 20.0 percent economic interest and an 18.5 percent voting interest in VimpelCom.
After the issue of additional VimpelCom shares is over, Norway's Telenor and Altimo, the telecoms arm of Alfa Group belonging to billionaire Mikhail Fridman, will hold 31.7 percent and 31.4 percent respectively of VimpelCom and 29.3 percent and 36.4 percent respectively of the voting rights. Minority shareholders will hold 17.0 percent of the company and 15.7 percent of the voting rights.
After the deal, VimpelCom will extend its board to 11 members to include two Weather officials. Telenor and Altimo will appoint three of them as before. Sawiris is also supposed to become a member of the board of directors.
MOSCOW, October 5 (RIA Novosti)
