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Another Report Claims VimpelCom Seeking Buyer for WIND Mobile

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Again, rumours have surfaced WIND Mobile is up for sale, as a new analyst report claims its sources note VimpelCom is seeking a buyer for its Canadian investment (via The Globe and Mail).

The head of research at Canaccord Genuity, Dvai Ghose, says the sale process has started and the first round of bids is due as early as Friday, according to his sources.

“While a potential VimpelCom sale of its ownership of Wind Mobile Canada would come as no surprise, given Wind’s challenges in Canada and VimpelCom’s focus on free cash flow, debt deleveraging and emerging markets, we were surprised to hear that a formal sale process is underway with initial bids due tomorrow,”

[…]

“We estimate that VimpelCom/Orascom has invested approximately $1.7-billion into Wind Mobile Canada to date including $442-million for their AWS spectrum.”

As for possible bidders, Ghose says Accelero Capital could be in running with outside funding. It was founded by Egyptian billionaire Naguib Sawiris, the former chief of Orascom. However, given Sawiris’ previous vocal opposition to telco competitiveness in Canada, we doubt he would recommend an investment here.

The Globe and Mail corroborated the report by noting its own source has said VimpelCom is “on the verge of making a strategic move” with its Canadian business. In January the publication cited a similar report, noting Rogers was mentioned as a potential buyer.

VimpelCom spokesperson Bobby Leach downplayed the report, saying “It is the opinion of an independent analyst and therefore does not represent any official views or statements of or by VimpelCom Group.” During the company’s recent quarterly earnings call, VimpelCom noted numerous options for WIND Mobile, with one of them being an “in-market merger”.

In January, WIND Mobile became Canada’s first 100 percent foreign-controlled telco, as WIND CEO Anthony Lacavera sold his shares in the company, which observers noted it was a sign the company was set to put itself up for sale. Even if a deal was to go through, barriers include the purchaser taking on the $770 million USD outstanding balance of Orascom’s loan to Globalive.

New wireless entrants have helped push prices lower in Canada and also improve plans, putting pressure on our incumbents. But if history repeats itself, WIND Mobile could see it being acquired by an existing ‘Big 3’ carrier, similar to what we saw with Microcell before it was purchased by Rogers in 2004.

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  • ray

    Guess we won’t be seeing WIND expand their coverage any time soon, if at all.

  • Probably not…

  • This is hardly surprising really, I’m surprised that it has taken this long. My brother was going to go with them, but he wanted an iPhone with high speed.

  • JB

    ROGERS is a potential buyer? Oh good god.

  • 1His_Nibs1

    So if it’s purchased by one of the ‘big 3″……so much for competitive prices on phone plans. Once again Canadian consumers will get the pleasure of taking it up the ass!

  • Farids

    This is what happens when “most” of the Canadian government and CRTC, its division to supposedly oversee and regulate the telecom operations and protect the consumer, take sides, protecting the big 3 instead. This is not a secret and has economic reasons: According to publicly available statistics, the government of Canada is one of very very few in the world, whose MAJORITY source of income is by taxing its residents. This is very significant, as Canada is the fourth richest country in the world in natural resources: on top of our oil, we pretty much have the entire periodic table under our feet and in abundance too. Our taxing system goes back to 1940’s and Second World War, when Canadians barely paid any taxs. The Canadian government needed to finance the fight against the Nazi Germans in Europe. The technology “THEN” made it inefficient to mine the natural resources in Canada “CHEAPLY” due to cold climate and difficult terrain. So, the government came up with the patriotic “War Time Tax” with promise to remove it shortly after the war ended. The War ended, rebuilding finished, but the War Time Tax remained, our government had found and gotten used to a very nice and easy income they didn’t have before the war. War Time Tax was quietly converted, renamed and refined to what we know as Federal Tax, HST and many others. Today, taxing is how the government makes most of its money, more like a business than a government: Government Inc. if you will! So, with that history: THE HIGHER THE PRICE OF A PRODUCT OR A SERVICE PEOPLE NEED AND BUY, THE MORE MONEY THE GOVERNMENT MAKES IN COLLECTED TAXES.That’s why, our government WILL NOT PROMOTE LOWER PRICES for any product, cellular, gas, hydro, etc. and is siding with the big 3. That’s why, companies like Wind are not allowed foreign investments because they promote lower, collected taxes and thus income for the government. they go down and get bought out by big 3

  • ward09

    F this. I’m sure Rogers will end up with Wind and that will be the end of there great rates.

  • GARY GRANT

    You are so right on !

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