04:40 PM
Thursday 30 January 2020
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Books – Alaa Hajjaj:
Vodafone Global Group and Saudi Telecom Company “STC” have announced that they have signed a memorandum of understanding to sell a possible 55% stake in the global group in Vodafone Egypt to the Saudi company, according to a statement from Vodafone yesterday.
According to the statement, the two parties reached an agreement to sell all the shares of Vodafone International in Vodafone Egypt with a value of approximately $ 2.392 billion.
The two companies intend to conclude final agreements after completing the necessary procedures and approvals from the relevant authorities, and to complete the negative financial examination of the unknown to Vodafone Egypt, and the sale is expected to be completed at the end of June 2020, according to the statement.
But a surprise may occur and the table will fluctuate before completing the possible deal, which is that Telecom Egypt gives a parallel offer, through the so-called “right of pre-emption”, which obliges the two companies to present the deal to Telecom Egypt as it holds the remaining 45% of Vodafone Egypt’s shares, and gives it the right To make a parallel presentation.
A legal source in the communications sector said to Masrawy that Vodafone’s global offer to Vodafone Egypt for sale does not necessitate submitting it to Telecom Egypt under the “pre-emption right” unless this right is stipulated in the shareholders agreement or the company’s articles of association.
Ayman Essam, director of foreign and legal relations at Vodafone Egypt, revealed that the “right of pre-emption” clause is stipulated in the shareholders agreement between Telecom Egypt and Vodafone International.
He said to Masrawy that, according to this right, after the completion of the procedures and setting the final deal price, the deal will be presented to Telecom Egypt.
Essam stated that Telecom Egypt has the right to make a parallel offer to the offer submitted by the Saudi company, provided that it is completely similar to the first offer, in which case it is entitled to acquire the entire Vodafone Egypt company.
However, the legal source clarified that the parties to the deal “Vodafone Global” and “STC” could obtain approval from the Financial Supervisory Authority to exclude the agreement from the applicable rules, meaning that the deal may be excluded – in the event of its conclusion – from activating the pre-emption right clause if it was Present in the shareholders agreement, subject to the approval of financial supervision.
In a statement to the Stock Exchange yesterday, Telecom Egypt said it was closely following the procedures for selling Vodafone’s stake in Vodafone Egypt.
The company added that it is studying all the alternatives available to it to deal with its investments in Vodafone Egypt, in light of the rights of the company according to the shareholders agreement, and in light of the final form of the planned acquisition.
On the other hand, a source in the telecommunications sector ruled out that Telecom Egypt submitted a similar offer to the Saudi company to acquire the remaining shares of Vodafone Egypt, due to the high value of the financial offer, which is not commensurate with the financial situation of Telecom Egypt currently.
The source said to Masrawy, that Telecom Egypt has pumped a lot of investments in infrastructure during the past two years, in addition to paying more than 5 billion pounds to purchase the fourth generation license, in addition to pumping it as investments as a mobile services operator in the “We” network, which reduces the opportunities Its ability to bid for Vodafone Egypt.
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