Veon said that its Global Telecom Holding (GTH) subsidiary has reached an agreement with the Egyptian Tax Authority (ETA) to settle all outstanding tax liabilities of GTH and its Egyptian subsidiaries, for a total amount of USD 136 million. The Egyptian Financial Regulatory Authority (FRA) also approved Veon’s cash tender offer to purchase the shares of GTH not currently held by Veon. The deal represents up to 1.99 billion shares or 42.31 percent of GTH’s issued, for EGP 5.08 per share.
To further simplify Veons corporate structure, following a successful completion of the mandatory tender offer and the requisite shareholder approval, GTH will be delisted from the Egyptian Exchange.
Following approval from the FRA, the mandatory tender offer is expected to start on 1 July. The mandatory tender offer will be open for 25 Egyptian business days. The revised offer price of EGP 5.08 per share for the mandatory tender offer represents a 39.6 percent premium over GTH’s average three-month share price and a 44.3 percent premium over GTH’s average six-month share price, in both cases referring to the period immediately prior to the original mandatory tender offer submission in February.
The adjustment to the initially announced offer price of EGP 5.30 reflects the impact of the tax settlement on the valuation of GTH. The tax settlement is in respect of tax liabilities of GTH and its Egyptian subsidiaries for the tax years 2000 through 2018. Veon has released the first settlement payment of USD 53.7 million by GTH to the ETA, in relation to tax years 2006 through 2007 and 2010 through 2018.
In respect of the years 2000 through 2005 and 2008 through 2009 for GTH and all years up to and including 2018 for GTH's Egyptian subsidiaries, the tax releases will take effect immediately on the payment of the second settlement of USD 82.3 million by no later than 31 December at which time GTH is expected to delist from EGX. GTH will call an extraordinary general assembly of shareholders to approve its delisting from the EGX upon the completion of the mandatory tender offer and to approve the asset transfer.
