The meeting approved the merger schedule that was submitted to shareholders meetings in each of the individual companies earlier this month. The merger of Iceland Telecom, Skipti and Íslenska sjónvarpsfélagið under the name and ID No. of Iceland Telecom takes effect as from 30 June 2005, with Iceland Telecoms articles of association applying for the combined company.
The meeting passed a motion authorising the board of the company to raise share capital by up to ISK 3,500,000,000 (nominal value) through the issue of new stock, with shareholders waiving their pre-emptive right to new shares. This authorisation will stand for 18 months, with the board deciding on the details of how the capital increase is to be made.
The meeting also approved amendments to Iceland Telecoms articles of association, establishing its name as Síminn, with Iceland Telecom as a subsidiary name. Another amendment was passed expanding the objectives of the company, which are now no longer restricted to telecommunications and IT services.
Ownership proportions
The aim of the merger of Skipti and Iceland Telecom is to simplify the managerial structure of both companies; Skipti is a holding company of investors who bought the states holding in Iceland Telecom. The television station Skjárinn will continue to be operated as an independent profit centre within Iceland Telecom in the same way as its other profit units in competitive operations. Iceland Telecoms operations will be brought into clearer focus as a result of the structural changes.
Agreement was reached between the boards of the companies on ownership proportions in the merger. These were assessed on the basis of their latest balance sheets, taking account of the changes in valuation of various balance-sheet items and the expected benefits resulting from the merger.
Shareholders in Skipti and Íslenska sjónvarpsfélagið are to receive shares in Iceland Telecom in exchange for their shares.
Additional share capital accompanying the merger
As a consequence of the share capital increase in connection with the merger, shareholders in Iceland Telecom other than Skipti will receive additional shares in the combined company. Skipti purchased a 98.88% share in Iceland Telecom in summer 2005 for ISK 66.7 billion, i.e. at a price per share of ISK 9.6. Other shareholders held 1.12% of the share capital before the merger.
Following the merger and the attendant share capital increase, shareholders in Skipti own 96.99% of Iceland Telecom. Others who were shareholders in Iceland Telecom now own 2.45% of the company, and shareholders in Íslenska sjónvarpsfélagið (other than Iceland Telecom) now own 0.56% of the combined company.