Telecom Egypt (“TE”) and Vodafone Group (“Vodafone Group”) signed today a modified Shareholders’ Agreement. The agreement includes changes to Vodafone Egypt’s (“VFE”) dividend policy, whereby VFE will pay a one-time dividend of EGP10 billion to its shareholders during the 2021 calendar year, EGP 2bn of which was paid in March. The parties have also agreed on a minimum dividend payout ratio of 60% of free cash flow going forward.

The modified signed agreement also gives Vodafone Group the right to transfer its shareholding in VFE within the broader Vodafone Group. TE maintains its existing rights in the agreement and has obtained certain enhanced minority rights including access to information.

“We are pleased to have reached an agreement that is mutually beneficial to both parties. Telecom Egypt has been and continues to be a strategic partner to Vodafone Group in the Egyptian market. This agreement guarantees the preservation of our strategic partnership in light of an enhanced shareholders’ agreement that provides Telecom Egypt with visibility on its investment and its expected returns based on Vodafone Egypt’s performance and gives our shareholders comfort that our participation in the company continues to be fruitful and rewarding. Telecom Egypt plans to utilize the cash inflow from the dividend to be received in 2021 to deleverage its balance sheet, reduce financing expenses and enhance profitability.”