Sawiris mortgages Orascom Telecom in Wind deal

The deal between Weather and Enel will see the former acquiring 62.75% of Wind for approximately Eur3 billion in cash, with Enel in turn reinvesting Eur300 million in Weather in exchange for a 5.2% equity interest.

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By  Tawanda Chihota Published  May 28, 2005

A bid consortium in which Orascom chairman Naguib Sawiris has been involved, has been selected as the winner of a controlling stake in Italian telco Wind Telecom. The consortium, known as Weather Investments, has now entered into an agreement with Wind's current owner and Italian utility Enel, to purchase the operator for Eur12.1 billion (US$15.1 billion). The deal between Weather and Enel will see the former acquiring 62.75% of Wind for approximately Eur3 billion in cash, with Enel in turn reinvesting Eur300 million in Weather in exchange for a 5.2% equity interest. The contract further provides that entities controlled by Sawiris will transfer to Weather, Global Depository Receipts (GDRs) representing 50% plus one share of Orascom Telecom for a value of Eur5 billion. "The development plan foresees Wind becoming the technological and commercial development heart of a group of operators targeting the Mediterranean basin, the Middle East and southeast Asia," read a statement from Weather Investments. Wind is the third largest mobile operator in Italy and also operates as a fixed line provider. The acquisition is set to be completed by year-end with Sawiris said to have agreed to proceed with the market listing of Weather Investments as soon as possible. Furthermore, in the financing package for the acquisition there is a provision for the refinancing of current Wind debt without recourse to Weather. The consortium said a portion of Weather's investment is expected to be financed through a loan collateralized by Orascom GDRs. Weather and Enel also entered into a put and call agreement to sell to Weather, Enel's remaining interest in Wind, during 2H06. If this action were taken, Enel would take a 26% stake of Weather. Orascom has also stated that it is seeking to divest the last of its African assets and will sell its controlling 65% equity stake in Congo Brazzaville's GSM operator Libertis Telecom, as well as its 100% holding in its Democratic Republic of Congo unit Oasis Telecom for a total consideration of US$130 million.

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