VEON and GTH sell their Pakistan tower business for USD 940 million

Amsterdam, 30 August 2017 – VEON Ltd. (NASDAQ: VEON, Euronext Amsterdam: VEON) (VEON) and Global Telecom Holding S.A.E (EGX: GTHE.CA) (GTH) announce that their subsidiary in Pakistan, Jazz, has signed an agreement for the sale of its tower business for approximately USD 940 million, subject to adjustments.

Jazz will be selling its wholly-owned tower company, Deodar, with a portfolio of approximately 13,000 telecommunication towers, to Tanzanite Tower (Private) Limited (Tanzanite), a tower operating company owned by edotco Group Sdn. Bhd. (edotco) and Dawood Hercules Corporation (Dawood).

The transaction will be on a cash and debt-free basis, with total consideration of PKR 98,700 million (USD 940 million)^{1, 2} . The enterprise value represents a high single digit multiple of contributed annual EBITDA, a significant premium to current VEON and GTH trading multiples.

At completion of the sale, Deodar will enter into a master services agreement (MSA) with Jazz, whereby it will continue to provide tower services to Jazz. The initial term of this MSA is twelve years and is renewable at Jazz’s discretion for three consecutive periods of five years each.

Commenting on the transaction, Jean-Yves Charlier, Chief Executive Officer of VEON, said:

“This transaction is highly value accretive for VEON and GTH and a further execution of VEON’s asset light strategy. It also reflects the start of a long-term partnership with a strong counterparty with significant experience in tower management.”

Proceeds from the transaction will be utilized for Jazz’s general corporate purposes, the funding of recently awarded spectrum and repayment of a proportion of Jazz’s outstanding debt. PKR 69,930 million (USD 666 million)¹ of the PKR 79,800 million (USD 760 million) ¹ cash consideration is expected to be received at closing, while the remainder will be paid within 12 months thereafter.

Completion of the transaction is subject to the satisfaction or waiver of certain conditions including receipt of customary regulatory approvals. Completion is expected to occur before the end of 2017.

Suresh Sidhu, Chief Executive Officer of edotco, commented: "edotco is delighted to expand its business in Pakistan by catering to the network requirements of Jazz, the country's number one digital communications company. The transaction also shows our commitment to Pakistan and the tremendous investment opportunities it offers."

As a result of the terms of the Jazz/Warid earn-out agreement, following the completion of the transaction, GTH's stake in Jazz will be approximately 83%.

1 Assumed exchange rate of USD/PKR: 105:1

2 PKR 18,900 million (USD 180 million) being in the form of a vendor loan note, payable to Jazz at or before three years from closing.