Vodafone Egypt intends to pay exceptional dividends to shareholders during 2021, according to an agreement with Telecom Egypt, which owns large stakes in Vodafone.
The value of the profits to be distributed amounts to 10 billion pounds, Vodafone Egypt. Two billion pounds were distributed during the month of March.
The dividend was distributed based on the amended shareholders’ agreement, which stated in its terms:
- A minimum future dividend of 60% of Vodafone Egypt’s free cash flows.
- Vodafone Global Enterprise has the right to transfer the ownership of its stake in Vodafone Egypt within the Vodafone Global Enterprise.
- Telecom Egypt maintains the rights contained in the current shareholder agreement, in addition to obtaining some additional minority rights, including the right to obtain information about its investment in the company.
In turn, Dr. Amr Talaat, Minister of Communications and Information Technology, stressed that this agreement comes within the framework of enhancing a climate of compatibility between companies.
This will reflect positively on the development of the Egyptian telecom market and improve the quality of services provided to users, he said.
Buying a share
The Saudi Telecom Company was aiming to buy Vodafone Global Enterprise’s share in the Vodafone Egypt, but the deal ultimately failed.
Vodafone said it would focus on growing its business in Egypt.
Telecom Egypt’s share is about 45% of Vodafone Egypt, while Vodafone’s global share is about 55%.
Meanwhile, Engineer Adel Hamed, CEO and Managing Director of Telecom Egypt, said that this improved agreement guarantees the preservation of the strategic partnership of the two parties in light of the amendments made to the agreement, which secures Telecom Egypt a better vision for its investment in the company.
It also reassures the shareholders of Telecom Egypt that continuing this investment is paying off, he said.
According to Adel Hamed, Telecom Egypt will use the cash flow from dividends to reduce the size of the current debt, to reduce financing costs and enhance the company’s profitability.
On the other hand, the agreement will allow Vodafone to continue pumping more investments, and thus business growth, according to Nick Read, CEO of the Vodafone Global Enterprise.
The agreement will also allow the company to provide innovative technological solutions, and work with Telecom Egypt, and the government, to achieve the state’s vision of digitization and financial inclusion.