VimpelCom and Global Telecom Holding today announced agreement to sell its 51 percent stake in Orascom Telecom Algerie (OTA) to the Fonds National d’Investissement (FNI), an Algerian National Investment Fund, for $2.643 billion.
VimpelCom will further invest in Algeria in a high speed 3G network to take full advantage of the potential for mobile data growth in the country.
Jo Lunder, chief executive officer of VimpelCom, said: “For VimpelCom and GTH, this value accretive transaction releases $4 billion in cash proceeds to pay down gross debt.”
OTA will distribute a dividend of $1.862 billion to GTH immediately prior to the closing of the transaction, which is expected to occur by the end of 2014.
The total dividends and proceeds due to GTH at closing are expected to amount to $4 billion. All proceeds will be used to pay down the outstanding shareholder loans provided by VimpelCom to GTH.
GTH will continue to exercise operational control over OTA and, as a result, both GTH and VimpelCom will continue to fully consolidate OTA. This partnership with the FNI provides OTA with a strong and stable shareholder structure on which to build and strengthen its operations in Algeria.
