Orange plans to buy outstanding shares in Belgian opco

News

The French operator announces how it intends to spend its €2.2 billion tax rebate awarded in November.

In November the French Council of State's (Conseil d’état) ruled in Orange favour regarding a long-standing dispute about tax paid in 2013 and is to receive a rebate of €2.2 billon – the principal plus interest.

After a board meeting earlier this week, this is how it intends to spend its windfall.

Bid for Belgian opco

Orange will make a conditional voluntary public takeover offer for all the shares of Orange Belgium that it does not yet own, saying, “This project is part of the continued efforts of the Orange Group to adapt the capital structure of its subsidiaries to their needs."

In a statment it explained, "The objective is to strengthen the Orange Group’s position in order to allow Orange Belgium to more efficiently deploy its strategy for long-term value creation and to react more effectively to major transformations in the Belgian market through greater financial flexibility.

"In this context, a delisting of Orange Belgium can be envisaged if the applicable thresholds are met, since the strategic ambitions of the entity can be realized without recourse to the public capital markets.
The offer would not be subject to any minimum acceptance threshold and would include a material adverse change clause."

However, this is not a done deal: “This proposal, which is only the expression of an intention and does not constitute a formal notification of a voluntary public takeover bid, will be submitted to the FSMA (the Belgian Financial Services and Markets Authority) for approval.”

Networks and transformation

It will spend about a quarter of the sum on networks in France and elsewhere, “for the benefit of its customers, as well as projects related to the ecological transition”.

About the same proportion will be used on the Group’s ongoing operational transformation, to improve its agility and performance.

Employees and causes

Based on the developments in France’s so-called Pacte Law of May 2019, the board looked at the broad lines of an employee share scheme in France and internationally for a total volume of around 30 million shares.

The aim in the longer term is that employees’ shareholding should reach 10% and the board is considering the terms to put this into practice in 2021.

The board also supported an extraordinary dividend for shareholders of 0.20 euros per share. A final decision will be made at board meeting to approve the 2020 accounts, then submitted to the shareholders’ meeting for approval.

A portion of the funds will be allocated to the group's social commitments around achieving carbon neutrality by 2040 and digital equality. Several projects will be fast-tracked, such as the deployment of Orange Digital Centers and the financing of carbon sinks.

The Orange Foundation’s budget for 2021 will be bolstered with by an exceptional grant to strengthen the support it provides to the most vulnerable population groups.

Any remaining balance will reduce the company’s net debt, which stood at €26.4 billion at the end of H1 2020.