SHARM EL-SHEIKH: Egyptian tycoon Naguib Sawiris believes he will in the longer term get seats on Russian group Vimpelcom’s board if the Russian company’s proposed $6 billion-plus purchase of his telecoms businesses goes ahead, he said on Tuesday.
Vimpelcom’s bid for control of Cairo-based Orascom Telecom and Italy’s Wind has "a very big chance" of succeeding, despite opposition from major Vimpelcom shareholder Telenor, Sawiris told Reuters in an interview.
Sawiris said he gave up a right under the original sale proposal to seats on Vimpelcom’s board to help secure the deal, which could create the world’s sixth-biggest mobile operator by subscribers and see Vimpelcom expand substantially in Asia, Africa and Western Europe.
But asked if he expected to secure seats eventually, he said: "We think in the long term that this will be the case, but we have sacrificed this position for now.
"But we believe that the company in the long term will have to have real representation."
Vimpelcom’s board approved the deal on Monday, outvoting Telenor, which vowed to vote against the purchase in a March 17 shareholder meeting and demanded its pre-emptive rights be safeguarded in the sale of new shares.
The row has threatened to reignite a bitter shareholder war between the Norwegian firm and Vimpelcom’s other major shareholder Altimo, the telecoms business of Russian billionaire Mikhail Fridman’s Alfa Group.
Sawiris said he was not worried that Telenor could block the deal, echoing comments from Vimpelcom’s chief executive who said he was confident shareholders would approve it.
Vimpelcom needs a simple majority of the shareholders who vote to get the deal through and already has the support of Altimo’s roughly 45 percent stake. Telenor has a voting stake of about 37 percent in Vimpelcom.
Asked what he and his holding company Wind Telecom would do to prevent Telenor from blocking the deal, Sawiris said: "I will do nothing. I will only contact them to understand their point of view and also contact Alfa to see their point of view."
"But as far as I’m concerned, I’ve signed the transaction, and I’m quite optimistic that it will take place," he said.
Analysts say Sawiris is keen to seal the deal because he is blocked from repatriating profits from Orascom’s lucrative Algerian unit Djezzy, which is locked in a bitter dispute over Algerian requests for over $800 million in back-taxes.
Sawiris said Orascom was ready to go to international arbitration in the dispute.
"We have prepared ourselves. We see no other option because of a lack of response from the Algerian government," he said.
Orascom has stakes in cell phone operators in countries including Egypt, North Korea, Zimbabwe, Canada, and Pakistan.