VimpelCom to put Wind Mobile up for sale: report

Canadian new entrant Wind Mobile is being groomed for a sale by parent company VimpelCom, according to a report from Canada’s Globe and Mail newspaper.

According to unnamed sources cited by the newspaper, VimpelCom (Amsterdam, Netherlands) has hired UBS (Zurich, Switzerland) to provide advice on a transaction that could generate up to C$1 billion ($979 million), while AAL Corp – the investment company owned by Wind Mobile (Toronto, Canada) chief executive Anthony Lacavera – is considering whether to bid for the operator in partnership with Naguib Sawiris.

Canadian new entrant Wind Mobile is being groomed for a sale by parent company VimpelCom, according to a report from Canada’s Globe and Mail newspaper.

According to unnamed sources cited by the newspaper, VimpelCom (Amsterdam, Netherlands) has hired UBS (Zurich, Switzerland) to provide advice on a transaction that could generate up to C$1 billion ($979 million), while AAL Corp – the investment company owned by Wind Mobile (Toronto, Canada) chief executive Anthony Lacavera – is considering whether to bid for the operator in partnership with Naguib Sawiris.

The founder of Orascom Telecom (Cairo, Egypt), Wind Mobile’s original backer and now controlled by VimpelCom, Sawiris had expressed his dismay at entering the Canadian market as recently as late 2011 – just two years after Wind Mobile’s launch – and so the reports suggest the Egyptian telecoms tycoon has had a somewhat abrupt change of heart.

Before VimpelCom can sell the company, however, it must secure support for its plan to gain full control of Wind Mobile from Lacavera, who has previously promised to resign once that happens.

The licensing of Wind Mobile in 2008 formed part of a government plan to introduce fresh competition into Canada’s moribund mobile-phone market, which has traditionally been dominated by the ‘big three’ of Bell Canada (Montreal, Canada), Rogers (Toronto, Canada) and Telus (Burnaby, Canada).

But Wind Mobile and other new entrants have struggled to make an impact, which explains Sawiris’ previous disenchantment and partly why VimpelCom might be looking to sell the asset.

The Globe and Mail report suggests Sawiris – who ceded control of Wind Mobile to VimpelCom as part of a package of Orascom Telecom assets – is potentially interested in trying to merge Wind Mobile with other Canadian new entrants, but he could face competition from the likes of Rogers, which has also been linked with a Wind Mobile takeover but reportedly refused to comment.

News that VimpelCom may in discussions about a sale come as little surprise following recent moves by the Amsterdam-headquartered communications group.

Last year, VimpelCom agreed to forgive Orascom Telecom loans to Wind Mobile, in an effort to spruce up the Canadian operator’s balance sheet.

Moreover, in announcing plans earlier this year to buy out Lacavera, it quickly took advantage of a change in Canadian law allowing foreign companies to own 100% of small telecoms businesses.

The Globe and Mail report says bids for Wind Mobile could range from C$500 million to C$1 billion.