Weather Investments/Orascom Telecom in $21.5 Billion Combination with VimpelCom

Cleary Gottlieb is representing Weather Investments, the mobile telecommunications company led by Egyptian businessman Naguib Sawiris, in its combination with Russian carrier VimpelCom in a transaction that will create the world fifth-largest mobile telecommunications carrier with $21.5 billion in pro forma net operating revenues.

Sawiris and Weather’s other shareholders will receive 325,639,827 newly issued VimpelCom common shares (NYSE: VIP) representing a 20% economic interest in the enlarged VimpelCom group and $1.8 billion in cash, and will also retain certain assets to be demerged from the Weather group of companies.

Following the issuance of the new VimpelCom shares to Weather, Norwegian telecommunications group Telenor will hold 31.7% of the economic rights in VimpelCom and Altimo Holdings & Investments, a company controlled by Russia’s Alfa Group, will hold 31.4%, with minority shareholders representing 17%.

VimpelCom is the second largest mobile phone operator in Russia and the largest operator in Ukraine, and also has a portfolio of telecom assets in the CIS countries and Southeast Asia. Weather’s key assets include the Italian wireless carrier Wind Telecomunicazioni and a 51.7% stake in Egypt-based Orascom Telecom, which in turn holds telecom assets throughout the Middle East and Africa as well as Canada. Weather’s Greek asset Wind Hellas Telecommunications was excluded from the deal.

On closing of the transaction, expected to occur in the first quarter of 2011 subject to certain conditions, VimpelCom will become the fifth largest mobile platform in the world by subscribers, with operations in 20 countries in Europe, Asia, Africa and North America.

The transaction also includes a significant financing component, with new debt raisings, refinancings and consent solicitations set to launch during the fourth quarter of this year and for which VimpelCom and Weather have received highly confident letters. The financing process is expected to include raising approximately $2.0-2.5 billion in debt, and is expected to continue to use the ring-fenced financing structures at Wind and Orascom Telecom.