VEON Announces Settlement of GTH Taxes, Approval of Mandatory Tender Offer and Comprehensive GTH Restructuring

26 Jun 2019

VEON Announces Settlement of GTH Taxes, Approval of Mandatory Tender Offer and Comprehensive GTH Restructuring Amsterdam, 26 June 2019 - VEON Holdings B.V. ( VEON Holdings ), a wholly-owned subsidiary of VEON Ltd. (NASDAQ, Euronext Amsterdam: VEON, together with VEON Holdings, VEON), today announces that its subsidiary Global Telecom Holding S.A.E. ( GTH ) has reached 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 Tax Settlement).

In addition, the Egyptian Financial Regulatory Authority (the FRA) has approved VEONs cash tender offer to purchase the shares of GTH not currently held by VEON (being up to 1,997,639,608 shares representing approximately 42.31% of GTH's issued shares), at an adjusted offer price of EGP 5.08 per share (the Mandatory Tender Offer ).

To further simplify VEON's corporate structure, following a successful completion of the Mandatory Tender Offer and the requisite shareholder approval, it is anticipated that GTH will be delisted from the Egyptian Exchange ( EGX ). Furthermore, VEON has submitted an offer to GTH to acquire substantially all of its operating assets (the Asset Transfer Offer ), subject to successful completion of the Mandatory Tender Offer and delisting. The asset transfers will be conducted at the imputed Mandatory Tender Offer valuation.

VEON's Chief Executive Officer Ursula Burns commented: These are significant transactions for both VEON and GTH, designed to benefit all stakeholders. A successful take-up of the Mandatory Tender Offer, followed by the delisting of GTH and subsequent asset transfers, will simplify the VEON Group structure while increasing its stake in operating companies in Pakistan, Algeria and Bangladesh.

Ursula Burns continued: We welcome the approval of the Mandatory Tender Offer by the FRA and appreciate the cooperation that all Egyptian authorities have extended to us in this process, especially the Ministry of Finance, the FRA, EGX and ETA, which demonstrates their efforts to improve the business environment in Egypt. We look forward to completing these transactions and the full restructuring of GTH by year end.

Details of Mandatory Tender Offer

Following the approval from the FRA, the Mandatory Tender Offer is expected to commence on 1 July 2019. 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% premium over GTH's average three-month share price and a 44.3% 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 2019. 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 Mandatory Tender Offer is made pursuant to an offer memorandum dated 26 June 2019 (the Tender Offer Memorandum ), which sets out a comprehensive description of the terms of the Mandatory Tender Offer. The Tender Offer Memorandum will be available at VEON's website (www.VEON.com). Shareholders in the United States should refer to the section titled Special notice to shareholders in the United States at the end of this announcement.

Details of Tax Settlement

The Tax Settlement is in respect of tax liabilities of GTH and its Egyptian subsidiaries for the tax years 2000 through 2018. Effective today, following the first settlement payment of USD 53.7 million by GTH to the ETA, GTH is released in relation to tax years from 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 GTHs 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 2019 at which time GTH is expected to delist from EGX.

Details of Delisting and Asset Transfer Offer

GTH will call an Extraordinary General Assembly of Shareholders (EGSM) to approve its delisting from the EGX (conditional upon the completion of the Mandatory Tender Offer) and to approve the Asset Transfer (conditional on the delisting). The offer prices included in the Asset Transfer Offer are reflective of the valuation of GTH undertaken for the Mandatory Tender Offer. Offer prices are as follows: in respect of Djezzy and Med Cable, DZD 70.195 billion; in respect of Banglalink, BDT 24.916; billion; in respect of Jazz, PKR 313.335 billion; and in respect of Mobilink Microfinance Bank, PKR 14.741 billion.

On the relevant date of transfer, the actual offer amounts for each asset will be determined in U.S. dollars using then applicable foreign exchange rates and adjusted for net debt, other financial and non-financial liabilities, debt-like items and working capital.

From an accounting perspective, as an inter-company transaction the asset transfers are expected to have no material impact on VEON Group's cash position and leverage should all GTH shareholders accept the Mandatory Tender Offer. Completion of the asset transfers is expected to occur by the end of 2019, subject to receipt of corporate and regulatory approvals.

VEON will hold a conference call on 26 June 2019 at 16:00 CEST to outline today's announcements in more detail. The slide presentation may be accessed at veon.com/fileadmin/user_upload/investors/reports/2019/gth-restructuring-ai-presentation_final.pdf

To join the conference call:

US call-in number: 1 (917) 720 0178

Confirmation ID: 9918039

UK and International call-in number: 44 (0) 203 009 5710

Confirmation ID: 9918039

Click to access associated documents

Forward-looking statements

This release contains forward

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