Egypt’s Orascom Telecom Holding (OTH) and its Russian parent Vimpelcom have agreed to provide one another with technical and commercial services to improve the efficiency of their businesses, Orascom said on Sunday.
Orascom also said it was changing its name to Global Telecom Holding SAE after Vimpelcom took control of the Egyptian company last year in a deal worth around $6 billion.
The two companies will provide the services for two years, charging fees at accounting cost plus a mark-up of 5 per cent, with the amount payable to Vimpelcom capped at $3.5 million annually, Orascom said.
It also said it planned to take control of Canada’s Globalive Investment Holding Corp. after Canada changed the law governing foreign ownership of local businesses.
The law allows Orascom’s Canadian holding company to convert non-voting shares in Globalive Investment Holding into voting shares, taking its proportion of the voting shares to 65.08 per cent from 32.02 per cent, the Egyptian company said.
“The changes will involve, amongst other things, the restructuring of OTH’s shareholder loans to the GIHC group and the cancellation of accrued interest of approximately 450 million Canadian dollars ($458.13 million),” Orascom said.
The change requires the approval of Canadian investment authorities, which the company expects by early next year.
Orascom’s founder Naguib Sawiris received a stake in Vimpelcom under the tie-up sealed in April 2011. He kept his stake in Orascom’s Egyptian mobile phone business Mobinil before selling most of it to France Telecom this year.
Orascom will submit the name change, the new arrangement with Vimpelcom and the Canadian shareholding changes to its own shareholders for approval next month.
Orascom is a name used by other companies controlled by the Sawiris family.
Orascom Telecom will seek shareholder approval to gain control of Canada’s Globalive Investment Holding Corp., taking advantage of a change in the country’s foreign ownership laws this year.
Orascom will seek to exercise an option to convert its shares with no voting rights in Globalive to common shares, which will increase those rights to 65.1 per cent from 32 per cent, it said in a filing to the Egyptian bourse.