AMSTERDAM, February 9 /PRNewswire/ --
-- Platform for Value Creation in Global Emerging Markets Telecoms
VimpelCom Ltd. today announces the commencement of its exchange offer to holders of shares and American Depositary Shares ("ADSs") of Open Joint Stock Company "Vimpel-Communications" ("OJSC VimpelCom") (NYSE:VIP), in which it will offer depositary shares representing VimpelCom Ltd. shares ("DRs") or a nominal cash amount in exchange for OJSC VimpelCom securities (the "Exchange Offer"). Immediately following the successful completion of the Exchange Offer, VimpelCom Ltd. intends to acquire all of the outstanding shares of Closed Joint Stock Company "Kyivstar G.S.M." ("Kyivstar") in exchange for VimpelCom Ltd. DRs (collectively referred to as the "Transaction").
Key benefits of the Transaction for shareholders of OJSC VimpelCom include:
- Ownership of Kyivstar, a leading mobile operator in Ukraine;
- Improved strategic profile with potential for operational improvements
and efficiencies;
- Creation of a robust corporate and governance structure which will
align the interests of all shareholders;
- Committed policy to pay regular and meaningful dividends; and
- Strong platform to unlock future growth and shareholder value creation.
Alexander Izosimov, CEO of VimpelCom Ltd., commented:
"Today's announcement is another big step towards launching VimpelCom Ltd. as a leading value creation platform in global emerging markets telecoms. With local leadership across Russian, Ukrainian and CIS markets, VimpelCom Ltd will have the right corporate and governance structure to drive further growth, profitability, cash flows and total returns for shareholders. The proposed transaction will unlock the full potential of both OJSC VimpelCom and Kyivstar and offer further value creation opportunities through operational improvements, while preserving the drivers of both companies' past performance and earnings resilience. Initial feedback from investors has been extremely supportive, and I am confident the Exchange Offer will be a great success."
On completion of the Transaction, VimpelCom Ltd. will be a leading mobile operator in Russia, Ukraine and the CIS, with a significant presence in Southeast Asia, with:
- Over 87.7 million subscribers as of September 30, 2009
- Pro forma net operating revenues of USD 12.6 billion for the year ended
December 31, 2008 and USD 7.4 billion for the nine months ended
September 30, 2009
- Pro forma net income for 2008 of USD 1.1 billion and USD 1.1 billion
for the nine months ended September 30, 2009
- Pro forma adjusted OIBDA of USD 6.3 billion with OIBDA margin of 49.8%
for 2008, and of USD 3.8 billion with OIBDA margin of 51.1% for the
nine months ended September, 2009
Jo Lunder has been designated as Chairman of the Board of VimpelCom Ltd. Mr. Lunder served as Chief Operating Officer of OJSC VimpelCom between 1999 and 2001 and Chief Executive Officer of OJSC VimpelCom between 2001 and 2003. He was Chairman of the Board of OJSC VimpelCom between 2003 and 2005. From 1993 to 1999, Mr. Lunder was employed in various capacities by Telenor and its affiliates.
Alexander Izosimov has been appointed as Chief Executive Officer of VimpelCom Ltd. He was CEO of OJSC VimpelCom between 2003 and 2009 and has previously held senior positions at McKinsey & Co. and Mars. Mr. Izosimov is currently Chairman of the GSM Association.
Exchange Offer and Terms
Telenor ASA ("Telenor") and Altimo Holdings & Investments Ltd. ("Altimo"), the majority owners of OJSC VimpelCom, have agreed, subject to the conditions described below, to contribute their respective shareholdings in OJSC VimpelCom and their combined 100% shareholding in Kyivstar to create VimpelCom Ltd., a leading emerging markets mobile operator with enhanced market presence and growth, profitability and cash flow generation prospects. The exchange ratio used in determining the post-contribution equity ownership by OJSC VimpelCom's and Kyivstar's respective shareholders is 3.4:1.
In the Exchange Offer, VimpelCom Ltd. is offering:
- to all holders of OJSC VimpelCom ADSs: one VimpelCom Ltd.
common DR (representing one VimpelCom Ltd. common share) in exchange
for each OJSC VimpelCom ADS;
- to all holders of OJSC VimpelCom common shares: twenty
VimpelCom Ltd. common DRs in exchange for each OJSC VimpelCom common
share; and
- to all holders of OJSC VimpelCom preferred shares: twenty
VimpelCom Ltd. preferred DRs (each representing one VimpelCom Ltd.
preferred share) in exchange for each OJSC VimpelCom preferred share.
Alternatively, holders of OJSC VimpelCom shares and ADSs may elect to receive a cash payment of 0.01 Russian roubles for each common share or preferred share and 0.0005 Russian roubles for each ADS. This nominal cash consideration is being offered to comply with Russian regulations and is not intended to constitute fair market value. Accordingly, VimpelCom Ltd. urges holders of OJSC VimpelCom shares and ADSs not to elect to receive cash consideration.
The Exchange Offer comprises a U.S. Offer and a Russian Offer. The U.S. Offer is open to all U.S. holders of OJSC VimpelCom shares and all holders of OJSC VimpelCom ADSs, wherever located. The Russian Offer is open to all holders of OJSC VimpelCom shares, wherever located. However, only shareholders who are "qualified investors" under Russian law may receive DRs in exchange for their shares tendered into the Russian Offer.
Successful completion of the Exchange Offer is contingent on, among other things, more than 95% of OJSC VimpelCom's outstanding shares being tendered in the Exchange Offer, all legal and regulatory proceedings involving Altimo and Telenor being terminated or withdrawn and the receipt of required regulatory and other approvals, including approvals by the anti-monopoly authorities in Russia and Ukraine. The Russian Governmental Commission on Foreign Investments announced its approval of the proposed transaction under the Russian Foreign Investment Law on February 3, 2010.
It is expected that, following completion of the Exchange Offer, OJSC VimpelCom will be delisted from the NYSE and will no longer be traded on the Russian Trading System.
In connection with the U.S. Offer, VimpelCom Ltd. has filed a registration statement on Form F-4 with the United States Securities and Exchange Commission (the "SEC") that contains a prospectus and related U.S. Offer acceptance materials. VimpelCom Ltd. will mail the prospectus, together with the related U.S. Offer acceptance materials, to U.S. holders of OJSC VimpelCom shares and to all holders of OJSC VimpelCom ADSs, wherever located. Holders of these securities are urged to read the prospectus and related U.S. Offer acceptance materials carefully because they contain important information. Copies of the prospectus and related U.S. Offer acceptance materials may be obtained from Innisfree M&A Incorporated, the information agent for the U.S. Offer, at the following telephone numbers: +1-877-800-5190 (for shareholders holders and ADS holders) and +1-212-750-5833 (for banks or brokers). Copies of the registration statement and exhibits also may be obtained free of charge from the SEC's website at www.sec.gov, and from VimpelCom Ltd.'s website at www.vimpelcomlimited.com.
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