VimpelCom to focus on cutting debt
As per VimpleCom’s Chief Executive, VimpelCom’s immediate priority will cut its large debt load rather than to increase its dividend, following a deal that could make it the world’s fifth-largest mobile phone operator.
According to reports citing, Alexander Izosimov , VimpelCom’s dividend was likely to be flat over the next two years but held out the prospect of the pay-out rising from 2013.
Last week, VimpelCom outlined plans to buy most of the telecoms assets of Naguib Sawiris, the Egyptian entrepreneur, in a US$6.6 billion deal, excluding debt. VimpelCom is planning to combine with Sawiris’s private investment company, Weather Investments, which owns Wind, Italy’s third-largest mobile operator, and 51.7% of Orascom Telecom, the Cairo-listed telecoms group.
Credit rating agencies responded to the deal by saying they might downgrade VimpelCom’s main operating subsidiary.
VimpelCom group’s net debt is expected to rise from $4bn to $24 billion following the Weather deal, which is due to close in February.
Wind has net debt of $11.2 billion and Orascom has net debt of $4.2 billion, and VimpelCom expects to raise up to $2.5 billion in new debt to help finance the Weather transaction. VimpelCom may borrow another $2 billion this year, partly to cover capital expenditure.
According to UBS analysts, the group’s net debt is set to be 2.5 times its EBITDA following the transaction, which is high by sector standards. The 2.5 multiple compares with 2.1 for European telecoms companies and 0.7 for mobile operators in emerging markets.
According to Mr Izosimov, it was probably a fair assessment to conclude that VimpelCom’s short-term priority would be to reduce its debt. VimpelCom’s dividend would rise in the medium term because the group should be able to tap Wind’s cash once debt has been paid down.
Djezzy would contribute 10% of VimpelCom’s earnings but the Algerian government is considering nationalizing the business. Without Djezzy, VimpelCom would have 159 million customers, making it the world’s sixth-largest operator.
Sawiris plans to be Long-Term investor in Italian Subsidiary
Egypt’s Naguib Sawiris has planned to be a long-term investor in the Italian telecoms market, through his local Wind subsidiary. He is also dedicated to investing in a LTE upgrade for the mobile network.
According to Sawiris, the company is and will be investing over the long-term in the Italian market focusing on our strategic paradigm to grow Wind from Good to Great. The company is also aiming to position Wind as the market consolidator in both fixed line and mobile, in addition to our serious intention to invest in the 4G telecom network.
Sawiris owns Wind Italy and a 51% stake in Egypt’s Orascom Telecom Holding via his holding company Weather Investments.
Sawiris Confirms talks with Vimplecom: Weather Investment
If reports are to be believed, Naguib Sawiris, chairman of Orascom Telecom said his holding company Weather Investments was talking to telecoms group Vimpelcom about a merger and was open to talks with others. This was the first time Sawiris has confirmed the talks after reports about the merger came.
According to Sawiris, the company is not only talking to them, but is talking to anybody. We have two things on our agenda right now – solving the Algerian issue and, second, finding a good partner for the group.
An earlier attempt by Sawiris to sell assets to South Africa’s MTN broke down after Algerian government refused to let Orascom pass on its unit Djezzy.
Djezzy, Orascom’s main revenue earner, was the deal’s crown jewel, and brokers and bankers worry intervention from the Algerian government could overshadow another deal attempt.
VimpelCom in talks with Coptic billionaire Naguib Sawiris to discuss merger of Weather Investments’s stakes in Orascom and Wind
Russian telecommunications service provider VimpelCom Ltd is in negotiations with Egyptian billionaire Naguib Sawiris, to fully merge Wind and a majority stake in Egyptian group Orascom Telecom under its umbrella.
According to the report, Sawiris would become a considerable minor investor in the newly created entity, which would include Sawiris Weather Investments’ 51 percent share in Egypt’s Orascom Telecom Holding and Italian mobile operator Wind Telecomunicazioni.
For the first quarter, VimpelCom’s net income was of US$412.22 million. Total operating revenues for the quarters’ were US$2.54 billion.
The transaction would create an entity with a combined total mobile subscriber base of more than 200 million customers.
VimpleCom was created by the merger of assets owned by Russia’s Alfa Group and Norway’s Telenor following an acrimonious and long running battle over their Ukrainian investments. VimpelCom is 39.6% owned by Telenor while Alfa’s Altimo unit controls 39.2% and minority shareholders own 21.2 percent. It is not clear what percentage Sawiris would end up with following the proposed merger.
Vimplecom to acquire stakes in Weather from Sawiris (Orascom)
According to Reuter’s, Russia’s Vimpelcom and Egyptian tycoon Naguib Sawiris are close to inking a term sheet for the sale of Sawiris’s Weather Investments. The later owns 51% share of Egyptian-based mobile group Orascom Telecom. Sawiris controls 100 percent of Italian telecom group Wind and just over 50 percent of Orascom Telecom via his holding company Weather Investments. Sawiris is working with Lazard, Deutsche Bank and Citigroup to sell Weather to Vimpelcom, citing financial speculation
Vimplecom declined to make immediate comment on the report on Tuesday and Orascom was not immediately available to comment.
MTN and Orascom independently confirm talks. Orascom may be talking to two others.
US$800 million to be raised by Orascom from shareholders
www.WirelessFederation.com/news: In a move to strengthen the balance sheet and ensure liquidity including financing needs, Orascom Telecom Holding (OTH) has announced to plan a Rights Issue to raise around US$800 million from its shareholders.
The proposed Rights Issue is subject to shareholders’ approval at the EGM to be held on December 27, 2009. Bank of America Merrill Lynch, BNP Paribas, Citigroup Global Markets Limited, Credit Suisse Securities (Europe) Limited and EFG-Hermes has been appointed by OTH to advise on the Rights Issue.
Weather Investments owning approximately 50.6% of the outstanding shares of the company has expressed its commitment to subscribe for a minimum of its existing pro rata share in the Rights Issue.
According to Naguib Sawiris, Executive Chairman of OTH, the transaction will enable the company to strengthen its balance sheet to benefit fully while the conditions improve across their core markets.
In the meantime the company will work towards the optimal resolution of the tax dispute in Algeria. The Rights Issue has been chosen at par as per common practice in the Egyptian Capital Markets.
Sawiris gets Wind
Press reports from Italy suggest that the Italian utility group Enel is ready to offload its 26.5% stake in the country’s largest alternative telco, Wind. Business newspaper Il Sole 24 Ore reports that Enel is hoping to raise around EUR2 billion from the sale. Enel is selling its share of Wind’s holding company Weather Investments to fellow investor Naguib Sawiris, giving the Egyptian businessman sole control of Wind. Sawiris is reportedly looking at merging Wind with his Orascom Telecom group ahead of an IPO next year.
Source- telegeography Wireless Mobile Telecom
