KARACHI: Following the first-ever merger of telecom companies in Pakistan, the new owner of Warid, Mobilink has assured that the permanent and contractual workforce of Warid would not be sacked, Daily Times learnt.
“Mobilink officials have said that there will no layoffs of Warid employees, as the company want to retain all the Warid’s workers to keep quality standards intact,” official sources told the scribe.
The combined business of Mobilink and Warid would serve over 45 million mobile customers and would become the leading mobile network in Pakistan, thus the buyer has no intention to fire any of Warid’s employees in order to cater higher subscribers’ base, sources added. Warid Chief Executive Officer Muneer Farooqui, while addressing a press conference, also confirmed that the acquisition transaction would successfully take place without layoffs.
On Thursday, VimpelCom and Global Telecom Holding (GTH), together with Warid Telecom Pakistan and Bank Alfalah Limited, announced that they have reached an agreement to merge their telecom businesses. The sources said that Mobilink has developed an initial set of projects aimed at transforming the merger to make it more efficient and responsive to the consumer’s needs.
Currently, Warid has total 950 permanent employees and around 1,000 contractual staff, making the total 1,950 while Mobilink has almost 9,000 to 10,000 employees.
The transaction is expected to create Capex and Opex synergies with a net present value of approximately $500 million. The combined revenue of both companies for 12 months was registered at $1.4 billion.
Warid, with its strong post-paid base and high quality 4G/LTE network, would complement Mobilink’s position in the market. VimpelCom and the Dhabi Group shareholders have agreed on a clear corporate governance structure. The board would consist of seven directors, out of which, six would be nominated by VimpelCom and GTH and one nominated by the Dhabi Group shareholders. Upon successful completion of the transaction, Mobilink’s CEO Jeffrey Hedberg would become the CEO of the combined business and Mobilink’s CFO Andrew Kemp would become the CFO of the combined function.
As part of the transaction, Mobilink would first acquire 100% shares of Warid in consideration for the Dhabi Group shareholders acquiring approximately 15% of the shares of Mobilink. Following the completion of transaction, the parties intend to merge Warid into Mobilink in due course.
The transaction is expected to close within six months from today, subject to obtaining approvals from the relevant authorities in Pakistan and the satisfaction of customary closing conditions. The merger is expected to close within 6 months from closing of the transaction, subject to the satisfaction of customary closing conditions. After a four year lock-in period following the date of closing of the acquisition transaction, the Dhabi Group shareholders would have the option to put their shares to VimpelCom/GTH, and VimpelCom/GTH would have the option to call the shares of the merged company held by the Dhabi Group shareholders, each at fair market value.