Mobilink, Warid merger completed

KARACHI: Amsterdam-based telecoms company VimpleCom Ltd on Friday said it, along with its associates, completed the merger transaction of Mobilink and Warid, creating synergies for 50 million plus subscribers of both the telecos in Pakistan.

VimpelCom, Global Telecom Holding (GTH), Warid Telecom Pakistan and Bank Alfalah – a shareholder of Dhabi Group -- announced the completion of the merger transaction. In November 2015, the two groups agreed to combine their telecommunication businesses. 

A statement said the transaction is expected to create capex and opex synergies of around $500 million with an annual run rate of more than $100 million of free cash flow improvements by year three. The combined revenue of both companies for the 12 months to March 2016 was $1.4 billion.

The statement said the completion of the transaction follows regulatory approval from all the relevant authorities and the subsequent exchange of shares. 

“Mobilink completed the acquisition of 100 percent of Warid’s shares, and the Dhabi Group Shareholders have acquired 15 percent of the shares of Mobilink,” it said. The combined Mobilink and Warid entity will be the leading telecommunications provider of 2G, 3G and LTE services in Pakistan.

“VimpelCom continues to make significant progress against its transformation program,” the statement quoted Jean-Yves Charlier, chief executive officer (CEO) of VimpelCom as saying. “We look forward to bringing innovative new products and services to our customers in Pakistan.”

Mobilink and Warid will benefit from VimpelCom’s one billion dollars investment in infrastructure building.  “The group’s new digital systems will enable faster roll-out of new local products and services, particularly in the areas of mobile entertainment, communications, the Internet of Things, and mobile financial services,” the statement said.

The statement said Chief Executive Officer Jeffrey Hedberg will hand over the CEO role of Mobilink and Warid to Aamir Ibrahim, currently Chief Commercial Officer and Deputy CEO of Mobilink.  Over the past two years, Mobilink’s revenue grew year-on-year to 12 percent from negative five percent, average revenue per user to 15 percent from negative 11 percent and earnings before interest, tax, depreciation and amortisation also improved.  

On the conclusion of the legal merger, the combined entity will have a single board and the management structure.  The legal merger of the two companies, which will result in one merged legal entity having the same board, is expected to be completed within approximately six months, subject to the fulfillment of the required legal processes in Pakistan, said the statement.  “Mobilink and Warid will shortly file a petition to the Islamabad High Court (IHC) in order to commence the process of legal merger,” said the statement.