Daily News Egypt (DNE) learned from closely related sources that Vodafone International obtained the initial approval from the National Telecommunications Regulatory Authority to proceed with transferring its contributions in its unit in Vodafone Egypt to Vodacom.
Vodafone International Group agreed to transfer the ownership of its stake in Vodafone Egypt to its South African company Vodacom, where its stake is about 55% of Vodafone Egypt, while Telecom Egypt owns the remaining 45%.
The sources added that after obtaining the approval, the company will start stock exchange procedures to replace its contributions in Vodafone Egypt with shares in Vodacom, increasing Vodafone’s ownership in Vodacom from 60.5% to 65.1%, which is expected to be implemented before the end of this year.
The deal amounts to approximately €2.722bn debt-free. It is worth noting that based on its stake in the company’s debt, Vodafone has an equity value of €2.365bn.
The ownership will be transferred by settling approximately 80% of the purchase consideration of €1.892bn by issuing 242 million new Vodacom ordinary shares to Vodafone at an issue price of ZAR 135.75 per share.
The company explained earlier that the settlement of the remaining 20% of the value of the transfer of shares will be settled in cash, amounting to €473m.
It also said that the completion of the deal is subject to a number of additional conditions, the approval of the Financial Supervision Department of the Reserve Bank of South Africa, and the approval of the NTRA in Egypt.
Furthermore, it explained that Vodacom has committed itself to Vodafone International that it will sign the deed of commitment to the shareholders’ agreement with Telecom Egypt.
In June 2021, Vodafone and Telecom Egypt signed an amended shareholder agreement between the shareholders of Vodafone Egypt.
The agreement granted many additional advantages and rights to Telecom Egypt in return for Vodafone Group obtaining the right to transfer the ownership of its stake in Vodafone Egypt within the Vodafone Group, conditioned on the submission of the new shareholder — to whom the share was transferred — a deed of commitment to all the terms contained in the amended shareholder agreement.
The statement said at the time that Vodafone Egypt’s management reported — quoting Vodafone Group — that Vodacom had committed to submit the aforementioned instrument to Telecom Egypt.