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.
Transaction Rationale
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 was 55.5%.
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%.
Analyst Call
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:
International: +44(0)20-7806-1956
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.thomson-webcast.net/uk/dispatching/?event_id=0506... 9d1dd41a283d250&portal_id=a869d5c2e790f409f7c268c62bba979a
(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.
About Kyivstar
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