Vodafone accepts Vodacom’s offer to acquire its 55% stake in Egypt – Markets & Companies – Business

FILE PHOTO: The building of Vodafone Egypt Telecommunications Co is seen at the Smart Village in the outskirts of Cairo, Egypt, October 27, 2015. REUTERS

Earlier today, Telecom Egypt (TE) said that Vodafone Group’s management has informed it about the offer, adding that the latter will disclose the value and structure of the offer.

Vodafone group currently owns 55 percent of Vodafone Egypt, while the remaining 45 percent are owned by TE.

TE’s Managing Director and CEO Adel Hamed said that amendments made to the shareholders’ agreement in July preserves TE’s rights and enhances its options to be more executable in the absence or presence of a deal.

“We believe that the amendments to the shareholders’ agreement enhances TE’s visibility on its investment and its expected returns based on Vodafone Egypt’s performance and gives our shareholders comfort that our participation in the company continues to be fruitful and rewarding,” Hamed said.

“The commitment of Vodacom to the deed of adherence of the shareholders’ agreement as was reported to us by Vodafone Egypt confirms Vodafone Group’s commitment to its strategic partnership with TE and the Egyptian market,” he elaborated.

On 7 June, TE and Vodafone Egypt signed a modified shareholders’ agreement which grants TE enhanced rights and benefits and allows Vodafone Group to transfer its shareholding in Vodafone Egypt within the broader group.

These rights grants TE the right to buy Vodafone shares in Vodafone Egypt through the right of first refusal (RoFR) process.

RoFR is a contractual right to enter into a business transaction with a person or company before anyone else can.

The agreement gives TE a longer RoFR duration and includes an independent expert to perform a valuation report.

Moreover, it grants TE the right to obtain a committed minimum dividend policy for Vodafone Egypt of 60 percent of free cash flow (FCF) starting 2022 besides EGP 10 billion of dividends to shareholders in 2021.

In January 2020, Saudi Arabia’s largest telecommunications operator Saudi Telecom Co (STC) signed a non-binding agreement to buy Vodafone Group’s majority stake for $2.4 billion, but extended the process in April by 90 days, citing logistical challenges caused by the coronavirus pandemic.

After one-year of negotiations, STC announced the termination of the deal a day after Egypt’s President Abdel-Fattah El-Sisi held a meeting in Cairo with the CEO of Vodafone Group to discuss cooperation between the group and Egypt’s information technology and communications sector.

short link:

Comments are closed.