Vodafone Egypt receives initial offer to transfer its stake to Vodacom

CAIRO - 10 November 2021: Vodafone Egypt has informed Telecom Egypt about receiving an initial offer from Vodacom for the Transfer of Vodafone group’s stake in the company to Vodacom, According to Telecom Egypt.

Telecome Egypt, which owns 44.95 percent of Vodafone Egypt, illustrated that the current modified shareholders’ agreement signed on 7 June 2021 by Vodafone Egypt’s  shareholders grants TE enhanced rights and benefits and allows VFG to transfer its shareholding in VFE within the broader Vodafone Group (as has been disclosed earlier).

The latter is conditional on the new shareholder submitting a deed of adherence to the new amended shareholders agreement, which Vodafone Egypt management has confirmed that Vodacom has committed to with Vodafone Group.

Telecom Egypt has obtained enhanced rights in the amended shareholders agreement, the most important of which are: the right to buy VFG’s shares in VFE, should the major shareholder change directly or indirectly, through the RoFR process, and a committed minimum dividend policy for Vodafone Egypt of 60% of FCF starting 2022 in addition to LE 10 billion of dividends to shareholders in 2021.

The rights also included the assistance by Vodafone Egypt management in a due diligence process in case of a full or partial sale by Telecom Egypt, a modified RoFR process allowing Telecom Egypt a longer RoFR duration and including an independent expert to perform a valuation report, and  a tag along option for a portion of TE’s shares in Vodafone Egypt, notwithstanding any other rights under the Egyptian law including the right to accept an MTO.

It added that they also contained information rights with regular disclosure to ensure visibility for Telecom Egypt on its investment in VFE

“We believe that the amendments to the shareholders’ agreement enhance Telecom Egypt’s visibility on its investment and its expected returns based on Vodafone Egypt’s performance and give our shareholders comfort that our participation in the company continues to be fruitful and rewarding. In addition, the new shareholders’ agreement preserves Telecom Egypt’s rights and enhances its options to be more executable in the absence or presence of a deal,” TE’s Managing Director and Chief Executive Officer, Adel Hamed, commented.

He added that the commitment of Vodacom to the deed of adherence of the shareholders’ agreement as was reported to us by Vodafone Egypt confirms Vodafone Groups’ commitment to the strategic partnership with Telecom Egypt and the Egyptian market.