Veon has announced that it is pulling out of an offer to buy stakes Global Telecom Holding (GTH) unit it has in its Pakistan and Bangladesh-based businesses. The multinational mobile phone operator justified its decision to pull out of those ventures by highlighting issues with the Pakistani currency as well as facing resistance from minority shareholders in GTH.
Veon had previously signaled its interest in acquiring $400 million worth of stakes in Pakistan and Bangladesh, and taking over $1.6 billion in debt, both of which are consolidated on its balance sheet.
Veon currently owns a 57.7% controlling stake in Egypt-based GTH. Back in July, GTH mentioned that it had received an offer to buy assets in Jazz and its associated operations in Pakistan for $2.55 billion from Veon.
During that time, GTH released a statement to the Egyptian Stock Exchange, mentioning that Veon will acquire GTH’s whole issued share capital in Mobilink Microfinance Bank, Telecom Venture Limited, International Wireless Communications Pakistan Limited, and Telecom Management Group Limited.
However, that deal did not go through, leading Veon to pull out from buying stakes in Pakistan as well as in Bangladesh.
If the deal had gone through, Veon may have indirectly paid around $1.2 billion of GTH’s debt. The takeover of the Amsterdam based firm could also have entailed taking over certain debt and payables of GTH, according to GTH’s statement to the Egypt Stock Exchange.
GTH says that its outstanding debts amount to $385 million which will be transferred to Veon as part of a potential deal.
The telecom company said that its board of directors is studying the offer and will proceed in accordance with applicable laws and regulations. GTH’s capital stands at EGP 2.7 billion, with over 4.7 billion shares trading at EGP 0.58 per share.