- 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") , 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
- Ownership of Kyivstar, a leading mobile operator in Ukraine;
- Improved strategic profile with potential for operational improvements
- 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
- 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
In connection with the Russian Offer, VimpelCom Ltd. has filed a
voluntary tender offer document with the Russian Federal Service for
the Financial Markets. OJSC VimpelCom will deliver the Russian
voluntary tender offer document, together with the recommendations of
its board of directors and related Russian Offer acceptance
materials, to holders of OJSC VimpelCom shares. Copies of the Russian
voluntary tender offer document and other documents related to the
Russian offer may be obtained from ZAO "National Registration
Company" ("NRK"), the agent for the Russian offer, at the following
telephone numbers: +7(495)-440-6324/25/45 ext.205, or from OJSC
VimpelCom at the following telephone number : +7(495)-974-5888.
Credit Suisse Securities (USA) LLC and Morgan Stanley & Co.
Incorporated are acting as dealer managers for the U.S. Offer.
Exchange Offer Timetable
The Exchange Offer has been launched today, February 9, 2010. The
U.S. Offer will close at 5:00 pm New York City time on April 15, 2010
and the Russian Offer will close at 11:59 pm Moscow time on April 20,
2010, unless extended.
Holders of OJSC VimpelCom shares and ADSs who wish to participate
in the U.S. Offer must deliver their U.S. Offer acceptance materials
to the U.S. exchange agent prior to the expiration of the U.S. Offer
in accordance with the instructions contained therein. Holders of
OJSC VimpelCom shares who wish to participate in the Russian Offer
must deliver their Russian Offer acceptance materials to the Russian
exchange agent prior to the expiration of the Russian Offer in
accordance with the instructions contained therein.
The combination of OJSC VimpelCom and Kyivstar into one
consolidated company will create a stronger business with enhanced
market presence and growth prospects, leading to substantial value
creation potential for OJSC VimpelCom shareholders and benefits for
all of our shareholders, subscribers and employees. In particular,
the Transaction will:
- Create a leading emerging markets mobile operator with over 87.7
million subscribers as of September 30, 2009, USD 12.6 billion pro
forma combined net operating revenues for the 2008 fiscal year and
USD 7.4 billion combined pro forma net operating revenues for the nine
months ended September 30, 2009;
- Improve OJSC VimpelCom's and Kyivstar's positions in their existing
markets, enabling them to take advantage of attractive opportunities
for in-market consolidation and raising the overall profile of the
combined group among its peers and competitors;
- Strengthen OJSC VimpelCom's and Kyivstar's strategic profiles;
- Enable OJSC VimpelCom and Kyivstar to be managed on a unified basis,
with the potential for operational improvements and efficiencies; and
- Align the interests of all shareholders of OJSC VimpelCom and Kyivstar
by resolving outstanding disputes between shareholders and creating a
basis for a robust corporate and governance structure.
VimpelCom Ltd.'s immediate focus will be to optimise its
financial, operational and marketing efficiencies in its core
markets. In the medium term, VimpelCom Ltd.'s strategy will be to
explore opportunities for further expansion in emerging markets,
including Asia and Africa, with the goal of creating value for
shareholders. VimpelCom Ltd.'s dividend policy will be to distribute
annually at least 50% of free cash flow from Kyivstar and 50% of free
cash flow from OJSC VimpelCom's Russian operations.
Corporate and Governance Structure
VimpelCom Ltd.'s majority shareholders are Altimo and Telenor,
which will hold 43.9% and 35.4% of the voting rights and 38.5% and
38.8% of the economic rights, respectively (assuming 100% acceptance
of the Exchange Offer), following successful completion of the
Transaction. Minority shareholders in VimpelCom Ltd. will represent
20.7% of the voting rights and 22.7% of the economic rights (assuming
100% acceptance of the Exchange Offer) following successful
completion of the Transaction.
VimpelCom Ltd. is incorporated in Bermuda, headquartered in the
Netherlands, and its common DRs are intended to be listed on the
NYSE. Altimo and Telenor have agreed a clear and robust corporate
governance structure and have entered into a shareholders agreement
governed by New York law that is designed to avoid deadlock
situations. Any future shareholder disputes will be resolved by
arbitration proceedings in London under UNCITRAL arbitration rules.
VimpelCom Ltd.'s governance structure is also designed to align
the interests of all shareholders. The Chairman and CEO of VimpelCom
Ltd. will be unaffiliated with Telenor and Altimo. The Board of
Directors will be comprised of three unaffiliated members, three
members designated by Telenor and three members designated by Altimo,
without any veto rights for any party. The affirmative vote of a
majority of the independent, unaffiliated shareholders will be
required for certain actions.
Summary Financial Data
OJSC VimpelCom reported net operating revenues of USD 10.1
billion for the year ended December 31, 2008 and USD 6.4 billion for
the nine months ended September 30, 2009.
Net income for the year ended December 31, 2008 was USD 587.3
million and for the first nine months of 2009 was USD 836.3 million.
Adjusted OIBDA margin for 2008 was 48.0% and for the first nine
months of 2009 was 49.8%.
Kyivstar reported revenues of UAH 12.7 billion for the year ended
December 31, 2008 and UAH 8.6 billion for the nine months ended
September 30, 2009. Kyivstar's profit for 2008 was UAH 5.1 billion
and for the first nine months of 2009 was UAH 2.8 billion. Adjusted
OIBDA margin for 2008 was 59.2% and for the first nine months of 2009
On a pro forma basis, VimpelCom Ltd. would have reported 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 would have been USD 1.1 billion
and for the nine months ended September 30, 2009 would have been USD
1.1 billion. Pro forma adjusted OIBDA margin for 2008 would have been
49.8% and for the first nine months of 2009 would have been 51.1%.
Alexander Izosimov, CEO of VimpelCom Ltd., will be hosting a
conference call for analysts and fund managers on Tuesday, February 9
at 14:00 London; 15:00 CET; 17:00 Moscow; and 09:00 EST. The dial-in
details are provided below:
UK toll free: 0800-028-1277
Russia toll free: 810-800-2546-1012
US toll free: +1-888-935-4577
Participants should dial-in 5-10 minutes prior to the call.
The conference call including Q&A will last approximately 1 hour.
Participants will also be able to view the presentation which
accompanies the call by accessing the following link: http://www.thom
(Due to the length of this URL, it may be necessary to copy and
paste the hyperlink into your Internet browser's URL address field.
Remove the space if one exists.)
About OJSC VimpelCom
OJSC VimpelCom is a telecoms operator providing voice and data
services through a range of mobile, fixed and broadband technologies.
It operates in Russia, Ukraine, Armenia, Georgia, Kazakhstan,
Uzbekistan, Tajikistan, Vietnam and Cambodia, covering territory with
a total population of approximately 340 million, and has agreed to
enter Laos through the acquisition of MIC Laos announced in September
2009. As of September 30, 2009, OJSC VimpelCom's total number of
active mobile subscribers in Russia, the other countries of the CIS
and Georgia was approximately 65.4 million, primarily under the
"Beeline" brand name. With OJSC VimpelCom's February 2008 acquisition
of Golden Telecom, a leading provider of fixed-line telecoms and
Internet services in Russia, OJSC VimpelCom transformed itself into a
leading integrated telecoms provider in Russia and the CIS. As of
September 30, 2009, OJSC VimpelCom had approximately 1.9 million
fixed and mobile broadband subscribers.
Kyivstar is the leading mobile operator in Ukraine by total
number of subscribers, with a 40.2% subscriber market share and
approximately 22.3 million subscribers as of September 30, 2009.
Kyivstar benefits from having a strong cash flow generation and low
leverage and a leading brand awareness, service, network coverage and
quality in Ukraine. It is a leader in key sub-segments of the
Ukrainian market, including the mass and youth segments, and is
focused on extending its broadband services, positioning itself as
the leading provider of multimedia services in its market. Telenor
currently owns 56.5% of Kyivstar's share capital through its wholly
owned subsidiary Telenor Mobile Communications AS and Altimo
currently owns 43.5% of Kyivstar's share capital indirectly through
its wholly owned subsidiary Storm LLC.
Important Additional Information
In connection with the U.S. Offer by VimpelCom Ltd. to acquire
all outstanding shares of OJSC VimpelCom (including those represented
by ADSs), VimpelCom Ltd. has filed with the SEC a registration
statement on Form F-4, which includes a prospectus and related U.S.
Offer acceptance materials to register shares of VimpelCom Ltd.
(including those represented by DRs) to be issued in exchange for
OJSC VimpelCom shares held by U.S. persons and OJSC VimpelCom ADSs
held by all holders, wherever located. In addition, VimpelCom Ltd.
will file a Statement on Schedule TO with the SEC in respect of the
U.S. Offer. Holders of OJSC VimpelCom securities are urged to
carefully read the registration statement (including the prospectus),
the Statement on Schedule TO, and any other documents relating to the
U.S. Offer filed with the SEC, as well as any amendments and
supplements to those documents, because they contain important
information. Free copies of the registration statement, including the
prospectus and related U.S. Offer acceptance materials, the Statement
on Schedule TO, and other relevant documents filed with the SEC in
respect of the U.S. Offer, can be obtained at the SEC's website at
. The prospectus and related U.S. Offer acceptance
materials are being mailed to holders of OJSC VimpelCom securities
eligible to participate in the U.S. Offer. Additional copies may be
obtained for free from Innisfree M&A Incorporated, the information
agent for the U.S. Offer, at the following telephone numbers:
+1-877-800-5190 (for shareholders and ADS holders) and
+1-212-750-5833 (for banks or brokers).
This announcement is not an offering document and does not
constitute an offer to sell or the solicitation of an offer to buy
securities or a solicitation of any vote or approval, nor shall there
be any sale or exchange of securities in any jurisdiction in which
such offer, solicitation or sale or exchange would be unlawful prior
to the registration or qualification under the laws of such
jurisdiction. The solicitation of offers to exchange OJSC VimpelCom
securities for VimpelCom Ltd. DRs in the United States will only be
made pursuant to the prospectus and related U.S. Offer acceptance
materials that are being mailed to U.S. holders of OJSC VimpelCom
shares and all holders of OJSC VimpelCom ADSs, wherever located. An
investor may only exchange OJSC VimpelCom shares for VimpelCom Ltd.
DRs in the Russian Offer if such investor is a "qualified investor"
under the applicable Russian rules and regulations. This announcement
is not for publication, release or distribution in or into or from
any jurisdiction where it would otherwise be prohibited.
This press release does not constitute advertisement of
securities, including securities of foreign issuers, in the Russian
Federation within the meaning of Federal Law No. 39-FZ "On the
Securities Market" dated April 22, 1996, as amended (the "Securities
Law"), Federal Law No. 46-FZ "On the Protection of Rights and Lawful
Interests of Investors on the Securities Market" dated March 5, 1999,
as amended, and Federal Law No. 38-FZ "On Advertising" dated March
13, 2006, as amended, or a public offer to purchase, sell, exchange
or transfer to or for the benefit of any person resident,
incorporated, established or having their usual residence in the
Russian Federation, or to any person located within the territory of
the Russian Federation, that does not fall under a legal definition
of a "qualified investor" within the meaning of Article 51.2 of the
Securities Law, or an invitation to or for the benefit of any such
person, to make offers to purchase, sell, exchange or transfer any
such securities. The securities of VimpelCom Ltd. have not been and
will not be admitted for placement, public placement or public
circulation in the Russian Federation within the meaning of Article
51.1 of the Securities Law.
Cautionary statement regarding forward-looking statements
This announcement contains "forward-looking statements."
Forward-looking statements provide VimpelCom Ltd.'s current
expectations or forecasts of future events. Forward-looking
statements include statements about VimpelCom Ltd.'s expectations,
beliefs, plans, objectives, intentions, assumptions and other
statements that are not historical facts. Any statement in this
announcement that expresses or implies VimpelCom Ltd.'s intentions,
beliefs, expectations or predictions (and the assumptions underlying
them) is a forward-looking statement. Words or phrases such as
"anticipate," "believe," "continue," "estimate," "expect," "intend,"
"may," "ongoing," "plan," "potential," "predict," "project," "will"
or similar words or phrases, or the negatives of those words or
phrases, may identify forward-looking statements, but the absence of
these words does not necessarily mean that a statement is not
forward-looking. Forward-looking statements are subject to known and
unknown risks and uncertainties and are based on potentially
inaccurate assumptions that could cause actual results to differ
materially from those expected or implied by the forward-looking
statements. Such risks and uncertainties include, but are not limited
- risks related to the timing or ultimate completion of the Transaction;
- the possibility that expected benefits may not materialise as expected;
- that, prior to the completion of the Transaction, OJSC VimpelCom's
business or Kyivstar's business may not perform as expected;
- that the parties are unable to successfully implement integration
strategies or otherwise realise any synergies that might arise from the
- future operating or financial results;
- expectations regarding the future growth of the telecoms industry;
- forecasts regarding future macroeconomic performance or results;
- future payments of dividends and the availability of cash for the
payment of dividends;
- future acquisitions, business strategy and expected capital spending;
- assumptions regarding interest rates and inflation;
- changes in governmental rules and regulations or actions taken by
- unanticipated changes in laws and regulations;
- potential liability from future litigation; and
- other risks and uncertainties that are beyond the parties' control.
If such risks or uncertainties materialise or such assumptions
prove incorrect, actual results could differ materially from those
expressed or implied by such forward-looking statements and
assumptions. The forward-looking statements contained in this
announcement are made as of the date hereof, and VimpelCom Ltd.
expressly disclaims any obligation to update or correct any
forward-looking statements made herein due to the occurrence of
events after the issuance of this announcement.
Questions on the U.S. Offer and requests for assistance may be
directed to Innisfree M&A Incorporated, or its London based
representative Lake Isle M&A Incorporated, the information agent in
connection with the U.S. Offer:
Innisfree M&A Incorporated Lake Isle M&A Incorporated
Arthur Crozier (New York) Michael Payne (London)
501 Madison Avenue 39 King Street
New York, NY 10022 London EC2V 8DQ
Tel: +1-212-750-5837 Tel: +44(0)20-7710-9964
Questions on the Russian Offer and requests for assistance may be
directed to NRK, the Russian exchange agent in connection with the
National Registration Company
Client Relationship Manager
Address: 6 Versaeva Street, Moscow, 121357
Tel: +7-495-440-6324/25/45 ext.205
Questions on VimpelCom Ltd. may be directed to Citigate Dewe Rogerson:
Citigate Dewe Rogerson
David Westover, Director
Andrew Hey, Director
3 London Wall Buildings
London EC2M 5SY, United Kingdom
Questions on OJSC VimpelCom may be directed to OJSC VimpelCom's
Investor Relations team:
OJSC VimpelCom Investor Relations Team
4 Krasnoproletarskaya Street
Moscow 127006, Russia
Questions on Kyivstar may be directed to:
Dag Melgaard, Group Communications
Dag Eide, Investor Relations
ots Originaltext: VimpelCom LTD
Im Internet recherchierbar: http://www.presseportal.ch
CONTACT: For the U.S. Offer: Arthur Crozier, Innisfree M&A
Incorporated,+1-212-750-5837 or Michael Payne, Lake Isle M&A
Incorporated,+44(0)20-7710-9964; For the Russian Offer: Svetlana
Galkina, NationalRegistration Company, Tel: +7(495)440-6324/25/45
ext.205, Mobile:+7-903-223-0764; For questions on VimpelCom Ltd.:
David Westover or AndrewHey, Citigate Dewe Rogerson,
+44(0)20-7638-9571; For questions on OJSCVimpelCom: OJSC VimpelCom's
Investor Relations team, Tel: +7(495)974-5888,Fax: +7(909)991-7903,
; Forquestions on Kyivstar,
Dag Melgaard, Group Communications, Telenor
, (+47)901-92-000, or Dag Eide,
Investor Relations,Telenor Group, firstname.lastname@example.org