intends to set Vodafone International, transferring its 55% stake in Vodafone Egypt to the South African Vodafone Group Limited “Vodakum”, following the approval of the regulatory authorities in Egypt, including the Telecommunications Regulatory Authority, as announced last November, and the value of the deal is 2.7 billion euros.
Here’s everything you need to know about Vodafone’s transfer of ownership to Vodacom:
1- Ownership Structure
Vodafone Egypt’s ownership structure is divided between 55% for Vodafone International, 44.8% for Telecom Egypt and the rest 0.2% for small shareholders.
2- Vodafone addresses the Telecommunications Regulatory Authority to transfer ownership of its stake in Egypt
Vodafone submitted an official letter to the National Telecommunications Regulatory Authority last November, about its intention to transfer the ownership of 55 percent of its shares to Vodafone, a subsidiary of the global group in South Africa.
Transfer of ownership requires the approval of the regulatory authorities in Egypt, including the National Telecommunications Regulatory Authority, which granted the license, the Financial Supervisory Authority, the Competition Protection Agency, and the Tax Authority.
3- Telecom Egypt rights
The deal guarantees the rights of the state-owned Telecom Egypt 80%, according to the amended shareholder agreement, the right to buy in the event that the main shareholder in Vodafone Egypt changes by way of pre-emption to include direct and indirect sales.
Adding an annual dividend distribution policy that stipulates distributing 60% of free cash flows annually as a minimum starting from 2022, in addition to Vodafone Egypt distributing exceptional cash dividends from retained earnings with a total value of 10 billion pounds during 2021.
Vodafone Egypt provides the necessary support and cooperation to Telecom Egypt regarding due diligence in the event of partial or total sale of Telecom Egypt’s stake in Vodafone Egypt.
Telecom Egypt obtaining the right to sell part of its stake to any potential buyer of the Vodafone Group stake, without conflicting with any other rights stipulated by Egyptian law, including the right to accept a compulsory purchase offer.
The right of Telecom Egypt to periodically obtain information about its investment in Vodafone Egypt.
4- Maximizing the use of financial services
The deal contributes to simplifying the operations management systems for the companies in which Vodafone operates in Africa, and maximizes the use of advanced financial services provided to its customers to achieve financial inclusion.
Improving the conditions for the right of pre-emption to allow Telecom Egypt to increase the period of application of its procedures, in addition to preparing the necessary evaluation by an independent consultant.
5- There is no change in the Vodafone brand
There is no change in the company’s brand in Egypt or any matter related to the user, the deal merely transfers Vodafone International’s ownership of 55% of Vodafone Egypt to its subsidiary Vodacom, according to sources familiar with the deal.