Despite a comprehensive roaming ban in many governorates of the Kingdom of Saudi Arabia, the sale of Vodafone Egypt was not negatively affected by these decisions, sources familiar with the deal confirmed that STC is still continuing its procedures to acquire a share of 55% of the largest mobile company in Egypt.
The sources confirmed for the seventh day that the Saudi operator is continuing with the procedures to deny the unknown, in preparation for the acquisition of Vodafone’s global stake in its company in Egypt.
This comes as Telecom Egypt has confirmed that there are no developments in the company’s position regarding the intention of the Vodafone Global Group to dispose of its stake in Vodafone Egypt, other than what has been disclosed, noting that the company’s board of directors has agreed to appoint a strong alliance that includes both Hermes and Citibank as investment banks, the Tamimi office and its partners as a legal advisor to provide a thorough study of the options available to the company with regard to dealing with its stake in Vodafone, and the company will announce the results of that study and any developments in its position at the time.
The Saudi company has started the negation checks for the unknown of the Vodafone Egypt sale, through financial and legal advisors for the two companies since mid-February, and the checks continue until next June, which can be extended.
The ownership structure of the Vodafone Egypt company is divided between 55% for Vodafone International, which is the target percentage of the Saudi purchase offer, 44.8% for Telecom Egypt and the rest 0.2% for small shareholders.
The potential deal is subject to the provisions of Chapter Twelve of the Executive Regulations of the Capital Market Law No. 95 of 1992 regarding purchase offers with the intent to acquire or not, as the Financial Supervisory Authority previously reported that the potential deal is subject to the provisions of the aforementioned section of the Executive Regulations.
According to the Vodafone shareholders law, Telecom Egypt has the right to use pre-emption right to purchase Vodafone’s global stake in its company in Egypt.
Section 12 of the Capital Market Law, which regulates purchase offers for the purpose of acquisition, provides for the purchase offers to be submitted in the following cases, namely; purchase offers for shares and bonds that are convertible into shares in companies whose shares or bonds are convertible into shares on the Egyptian Stock Exchange either directly or Indirectly, and the corresponding foreign certificates of deposit or purchase offers for shares and bonds convertible into shares in companies that offered their shares in a public offering in the first market or through a public offering in the trading market, even if they were not listed on the stock exchange.
Vodafone submitted an application to the Competition Protection Authority on February 12th, to study the legal situation regarding the use of Telecom Egypt by the right of pre-emption to purchase Vodafone’s global stake in Vodafone Egypt, after signing a memorandum of understanding with STC to purchase 55% of its stake in Vodafone Egypt However, the request is still being considered by the competition protection authority.
Whereas Telecom Egypt adhered to all its rights in the deal from the first guaranteed right of pre-emption guaranteed to it in the shareholders agreement and the articles of association of Vodafone Egypt, and the right to accept a compulsory purchase offer in accordance with the letter of the Financial Supervision Authority in the entry into force of the twelfth section of the executive regulations of the Capital Market Law No. 95 of 1992 Of purchase offers with the intention of acquisition, and any other rights guaranteed by the relevant Egyptian laws and shareholders agreement.
Telecom Egypt announced at the time that it had chosen an alliance from EFG-Hermes and Citibank, to study the options and implications of the STC acquisition of Vodafone’s global stake in Vodafone Egypt, according to the rights of “Telecom Egypt”, by the shareholders agreement and Egyptian laws.
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