Sawiris pulling out of Vimpelcom, to sell Telenor 71 mln prefs for $113.6 mln
MOSCOW. Aug 16 (Interfax) - Egyptian billionaire Naguib Sawiris' Weather will be selling its remaining stake in Vimpelcom of 17 million preferred shares to Norway's Telenor under a put option.
Telenor said in a statement that the deal's price tag will be $113.6 million and that the sale is to be concluded before October 1.
Telenor received an address from Weather Investments II on August 15 about the company's intentions to take advantage of the option from February 15, 2012 for the sale of 71 million Vimpelcom prefs (3.44% of votes). The right to use the option entered into force this Wednesday, the statement said.
On Wednesday, Vimpelcom's Russian shareholder, Altimo (the telecoms arm of Russia's Alfa Group) said that it had bought 305 million common shares (18.7% of capital and 17.8% of votes) in Vimpelcom from Sawiris' Weather Investments II for $3.6 billion.
As a result of this deal, Weather was left without a stake of ordinary shares, and Altimo's holdings in Vimpelcom increased to 51% of ordinary shares, or 40.5% of votes (with an additional purchase on the market of 0.7% of votes for $152.7 million).
After the deal with Altimo, Sawiris was only left with a stake of 71 million prefs (they have the right to a vote, but in contrast with ordinary shares, they are not traded and do not imply rights to dividends). Once Telenor satisfies the option demand, the Egyptian billionaire will no longer be a shareholder in Vimpelcom.
The option for Sawiris to sell his remaining stake of Vimpelcom prefs is part of a deal between Telenor and Weather that was signed in February. At that time, Telenor acquired 234 million Vimpelcom prefs from Sawiris for $374.4 million. As a result, the Norwegian company raised its voting stake in Vimpelcom from 25.01% to 36.36%, and Sawiris reduced his stake to 18.28% of votes (18.78% of economic interest).
Russia's Federal Anti-Monopoly Service (FAS) is challenging the February deal, having filed a lawsuit at the Moscow Arbitration Court demanding that Telenor's purchase of 234 million Vimpelcom prefs, as well as the option to buy the remaining shares, be declared invalid.
The FAS' argument is based on the grounds that it was not approved as required by Russian legislation on foreign investment, since Vimpelcom wholly owns Russian mobile operator OJSC Vimpelcom . The court has not made a decision yet, and the next hearing is scheduled for October 17.
Telenor told Interfax that it expects the FAS to drop its claims once the deals between the shareholders are finished.
Commenting on the deal between Altimo and Weather, Telenor's official representative in Russia Anna Ivanova-Galitsina said, "Altimo can freely buy shares in Vimpelcom if it does not violate any laws and the company's charter. The same goes for Telenor. We expect that the FAS will now cancel its lawsuit, since the subject for dispute has ceased to exist."
The FAS has said that it is prepared to settle the dispute over the deal with Vimpelcom stock. The regulator has prepared the terms of an amicable agreement, one of which is that Telenor not obstruct the parity between foreign and Russian shareholders. It is also demanding that the foreign shareholders not increase their stake in the company until parity is reached, and that there be equal representation on the Vimpelcom board of directors between the Russian shareholders and all foreign investors. In addition, it demands that the general director of Vimpelcom be a Russian citizen, the newspaper Kommersant reported with reference to its sources.
Having satisfied Sawiris' demand to buy Vimpelcom prefs under the option, Telenor will go against at least one of the FAS' demands. Incidentally, there is the likelihood that Altimo will be able to increase its stake by October 1 by buying prefs (5.995% of votes) from Ukrainian businessman Viktor Pinchuk's EastOne. Altimo sold that stake itself a year ago.
Sawiris became a co-owner in Vimpelcom in April 2011, selling it 100% of the holding Wind Telecom's shares, which includes Italian operator Wind Telecommunicazioni and 51.7% of shares in Orascom Telecom Holding. Weather Investments, which belongs to Sawiris, received 29.6% of Vimpelcom's voting shares (18.8% of economic interest) as a result of the deal.