Egypt’s woes puts VIP deal back in question

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Russian telecom may not be sexy, but it is emerging as a more stable business than Egypt, and this might raise new questions about VimpelCom’s proposed merger with Egypt-based Orascom Holdings’ telecom assets. 

As it is, VIP will now pay only $1.5 billion in cash for ORSTF and its wireless networks spread around the Mediterranean and across South Asia and make up the $300 million shortfall in the $6.8 billion deal with preferred stock.

But with Egypt in turmoil and local carriers forced to crack down on voice and data traffic, is it even worth $1.5 billion?


If this deal unwinds, expect a major positive move from VIP — out of relief.

Previously we covered the terms:

VIP scales back ORSTF merger terms

By Tim Seymour

January 17th, 9:57 am

VimpelCom may get its board of directors to approve a slightly less generous proposal to buy the frontier markets telecom assets of Egypt’s Orascom holdings.

VIP (quote) will now pay only $1.5 billion in cash for ORSTF (quote) and its wireless networks spread around the Mediterranean and across South Asia and make up the $300 million shortfall in the $6.8 billion deal with preferred stock.

However, that much voting stock would also give ORSTF owner Naguib Sawiris 31% of the proxies in the combined company — more than current major shareholder Telenor (TELNY), which has once again voted against the proposal.

 



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: News Headlines , International , Stocks

Referenced Stocks: ORSTF , TELNY , VIP

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