By December 1, 2015

It’s Official Now: Mobilink & Warid Merge into One Company

It’s Official Now: Mobilink & Warid Merge into One Company

Mobilink and Warid telecom join hands to merge into one single company; it is confirmed after official press conference. VimpelCom issued an official statement in which it declared that both Warid Telecom and Mobilink will merge into one company with 45 million combined customers. Both companies have signed the agreement in a press conference that held in Lahore.

Details:

  • Mobilink’s CEO Jeffrey Hedberg will become the CEO of the combined business and Mobilink’s CFO Andrew Kemp will become the CFO of the combined function, once the transaction would be completed after up to 1 year. The board of the merged company will be consisted of 7 directors. VimpelCom and GTH (Mobilink) will be eligible to choose 6 directors while the remaining 1 will be chosen by the Dhabi Group shareholders.
  • Mobilink sent a notice to Karachi Stock Exchange in which it said that merged company will have joint revenue of 1.4 billion dollars for 12 months till September of this year, while EBITDA margin of above 40%. The transaction is expected to create Capex and Opex synergies with a net current value of around USD 500 million as said further by Mobilink in the notice. Furthermore, the merged company will have a well-built monetary outline with Pro Forma Leverage in terms of Net debt/EBITDA or around 1.8 times more upon signing that will develop more downwards as synergies turn up.

Chief Executive Officer of VimpelCom, Mr. Jean-Yves Charlier, commented on the agreement and said,

We are pleased to publicize the agreement with the Dhabi Group shareholders today to merge our businesses in Pakistan. With the addition of Warid to our already well-built customer base at Mobilink, we will serve more than 45 million customers and present a best-in-class mobile and high-speed data network – a major factor in the digital enablement of Pakistan’s financial system. This transaction follows numerous planned milestones for the company, including our current joint venture declaration with WIND and 3 Italia in Italy and the agreement to put up for sale our operations in Zimbabwe. This is up till now another significant step in our voyage to continue delivering on our policy to renovate VimpelCom and get better our competitive spot in our operating markets.

The Chairman of Dhabi Group, His Highness Sheikh Nahyan Mubarak Al Nahyan, also shared the comments and said,

Creating the major operator in Pakistan is a considerable landmark for Mobilink and Warid but also for Pakistan all together. Warid’s corporation with Mobilink will generate worth for all stakeholders and cover the way for outstanding and cost-efficient telecommunication services for customers. Both parties get their unique strengths to this merger. Warid, with its strong post-paid base and high quality 4G/LTE network will balance Mobilink’s place in the market. We are very happy to carry on contributing to the growth of the competitive landscape for the broader telecom sector and the on the whole market of Pakistan. The transaction reaffirms my own and my fellow investors’ long-standing and continuing pledge to Pakistan.

Additional Transaction Details:

  • As part of the Transaction, Mobilink will 1st gain 100% of Warid’s shares in consideration, while Dhabi Group shareholders will acquire about 15% of the shares of Mobilink. This course may take up to 6 months from today and is subject to regulatory approvals.
  • Warid and Mobilink will merge into 1 company after this that will need another 6 months to close and regulatory approvals.
  • After a four year lock-in period following the date of closing of the Acquisition Transaction, the Dhabi Group shareholders will have the choice to put their shares of the merged company to VimpelCom/GTH, and VimpelCom/GTH will have the choice to call the shares of the merged company held by the Dhabi Group shareholders, each at fair market value.

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