Dec. 2 (Bloomberg) -- VimpelCom Ltd., seeking a $6.5 billion merger with Naguib Sawiris’s Orascom Telecom Holding SAE and Weather Investments SpA, aims to close the deal in the first half of 2011 as it seeks approval from shareholders.
The company said in October it planned to complete the merger “early February.” Today, Chief Executive Officer Alexander Izosimov said in a statement that he “anticipates” closing the deal in the first half of 2011.
“Given the size and complexity of the deal, we are satisfied with the progress made thus far,” Izosimov said. “We remain committed and continue to move forward.”
The two companies have yet to sign an agreement to create the world’s fifth largest mobile-phone company as Orascom tries to resolve a dispute with the Algerian government over its local unit, Djezzy. The Algerian government, which wants to buy Djezzy, has ordered Orascom to pay more than $800 million in back taxes and banned it from transferring money abroad, penalties that the company has contested.
The Egyptian company has said it could be in international arbitration by the second quarter of next year unless it can resolve the dispute.
Orascom has sought to cut debt ahead of the merger with the Russian company. In November, it agreed to sell its 50 percent holding in Tunisiana for $1.2 billion, in a deal that was supported by VimpelCom, which said it couldn’t gain full control of the asset.
Sawiris may consider selling assets individually rather than as a group to VimpelCom, analysts, including ING Groep’s Dalibor Vavruska, have said.
Orascom is selling the Tunisian holding at a multiple of 6.7 times 2009 earnings before interest, taxes, depreciation and amortization, higher than the 6.2 multiple for the VimpelCom deal.
VimpelCom said today that third-quarter net income rose 14 percent from a year earlier to $496 million. Net operating revenue climbed 24 percent to $2.82 billion.
To contact the reporter on this story: Jonathan Browning in London via firstname.lastname@example.org.
To contact the editor responsible for this story: Vidya Root at email@example.com