Brussels, 10 February 2023
Public announcement pursuant to Article 7:97, §4/1 of the Code of Companies and Associations ("CCA") regarding the financing arrangements of the acquisition of shares in VOO SA
On 24 December 2021, Nethys SA and Orange Belgium SA (“OBE”), acting in the name and on behalf of a company to be incorporated, NewCo SA, signed an agreement to transfer shares in VOO SA. In this context, Orange SA issued on the same day a parent company guarantee in favour of Nethys SA, guaranteeing the payment obligations subscribed by NewCo under the terms of this agreement, up to a maximum amount of EUR 1,358 million.
Notwithstanding the fact that the acquisition is subject to the condition precedent of approval by the European competition authorities, Orange SA and OBE have prepared the financing arrangements necessary to meet the payment obligations entered into by OBE in connection with this acquisition as soon as this approval has been obtained.
Thus, on 20 May 2022, OBE signed a counter-guarantee in which it undertook to reimburse Orange SA for any amount the latter would have to pay to Nethys SA under the Parent Company Guarantee. The same letter set Orange SA's remuneration for the issuance of the Parent Company Guarantee at an annual fee of 45 basis points to be paid on the uncalled amount of the Parent Company Guarantee.
In addition, OBE has negotiated a EUR Credit Facility Agreement with its direct shareholder, Atlas Services Belgium SA ("ASB"), to provide OBE with financing for the acquisition of shares in VOO SA (estimated value between EUR 1.6 and 1.7 billion at 100%) and for the purchase of a 5G license under the public tender issued by the Belgian Institute for Postal Services and Telecommunications (BIPT) in June 2022 (estimated value of EUR 400 million). The terms of the loan that will result from this credit line upon drawdown are based on a variable 6-month EURIBOR rate (rate set for each 6-month period at the beginning of the period). This agreement, the terms of which were agreed between the parties on 20 April 2022, will be signed around the Closing date of the acquisition of the shares in VOO SA, which is expected to take place in the course of 2023 and depends in particular on the date on which the European Commission approves the transaction. It has a term of five years.
Since the above transactions fall under Article 7:97 of the CCA, the board of directors of OBE has set up a committee of three independent directors to assess the above transactions. This committee, assisted by an investment bank and a law firm acting as independent experts, has issued a written opinion on this subject to OBE's board of directors on 20 April 2022.
In this opinion, the committee of independent directors considered, amongst other things, that:
At its meeting on 21 April 2022, OBE's board of directors, based on the opinion of the committee of independent directors, has decided to approve the signing of the counter-guarantee letter by OBE in favour of Orange SA and the loan agreement.
Subsequently, given the amount of the loan and the development of interest rates, OBE wished to set up pre-hedges and interest rate hedges with ASB to this end. These were the subject of a new contract to be concluded between OBE and ASB, also falling within the scope of Section 7:97 CCA.
OBE proposed to use a hedging or pre-hedging instrument to fix all or part of the effect of the variability of the 6-month interest rate. The instrument chosen is the Interest Rate Swap (IRS) or forward IRS (corresponding to an IRS of which the start is deferred). The main terms of this IRS are: an interest receivable by OBE based on the 6-month EURIBOR rate, an interest payable by OBE based on the 5-year fixed rate.
The combination of the variable rate loan (paid by OBE), the variable rate IRS (received by OBE) and the fixed rate IRS (paid by Orange) will convert the variable rate loan into a 5-year fixed rate loan.
The hedging contracts will be concluded with ASB on the terms that would apply to Orange SA for the same transaction in the financial markets, i.e. without any margin on the rate and benefitting from Orange SA's creditworthiness.
OBE's board of directors has instructed the committee of independent Directors to issue an opinion on this new transaction.
Given the nature of the proposed transaction and the explanations provided to them, the independent directors did not consider it necessary to seek the opinion of an independent financial or legal expert.
This committee issued a written opinion on this subject to the OBE board of directors on 19 October 2022.
In this opinion, the Committee of Independent Directors considers, amongst other things, that:
At its meeting on 19 October 2022, OBE's board of directors, based on the opinion of the committee of independent directors, decided to approve the signing of the hedging contracts by OBE. These have been signed on 21 November 2022.
Finally, the assessment of these transactions made by the auditor of OBE in accordance with Article 7:97, §4 CCA reads as follows: “nothing has come to our attention that would cause us to believe that the accounting and financial data contained in the minutes of the board meetings of 21 April 2022 and 19 October 202 and in the opinions of the committee of independent directors of 20 April 2022 and 19 October 2022, prepared in accordance with the requirements of Article 7:97 CCA, would contain material inconsistencies with the information available to us in the context of our engagement”.
About Orange Belgium
Orange Belgium is one of the major telecommunication operators on the Belgian market, with over 3 million customers, and in Luxembourg, via its subsidiary Orange Communications Luxembourg.
As a convergent player, it provides next generation connectivity services to residential customers through multi-gigabits mobile, cable and optic fiber networks, also relating to the Internet of Things. Its high-performance mobile network is equipped with the latest technologies and benefits from continuous investments. As a responsible operator, Orange Belgium is also investing to reduce its ecological footprint and promote sustainable and inclusive digital practices.
Orange Belgium is a subsidiary of the Orange Group, one of the main operators in Europe and Africa for mobile telephony and internet access and a world leader in telecommunication services for companies.
Orange Belgium is listed on the Brussels Stock Exchange (OBEL).
For more information go to: corporate.orange.be, www.orange.be or follow us on Twitter:
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