UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
UNDER SECTION 14(d)(4) OF THE SECURITIES
EXCHANGE ACT OF 1934
MILLICOM INTERNATIONAL CELLULAR S.A.
(Name of Subject
Company)
MILLICOM INTERNATIONAL CELLULAR S.A.
(Name of Person
Filing Statement)
Common Shares, par value $1.50 per share
(Title of Class
of Securities)
L6388F110
(CUSIP Number
of Class of Securities)
Mauricio Ramos
Chair of the Board
Millicom International Cellular S.A.
2, Rue du Fort Bourbon,
L-1249 Luxembourg
Grand Duchy of Luxembourg
Phone: +352 691 750960 / +1 908 463 8588
(Name, address, and telephone numbers of person
authorized to receive notices and communications
on behalf of the persons filing statement)
With copies to:
William H. Aaronson
Michael Senders
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
¨ |
|
|
Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
TABLE OF CONTENTS
INTRODUCTION
This Solicitation/Recommendation Statement filed
under cover of Schedule 14D-9 (together with the exhibits attached hereto, this “Schedule 14D-9”) is filed by
Millicom International Cellular S.A., a public limited liability company (société anonyme) organized and established
under the laws of the Grand Duchy of Luxembourg (“Luxembourg”), having its registered office at 2, Rue du Fort Bourbon,
L-1249 Luxembourg, Luxembourg, with corporate registration number B40630 with the Luxembourg Trade and Companies Registry (R.C.S. Luxembourg)
(the “Company”), and relates to the Offers (as defined below) by Atlas Luxco S.à r.l., a private limited liability
company (société à responsabilité limitée) existing under the laws of Luxembourg, having its
registered office at 53, boulevard Royal, L-2449 Luxembourg, Luxembourg, with corporate registration number B274990 with the Luxembourg
Trade and Companies Registry (R.C.S. Luxembourg) (“Purchaser”), a subsidiary of Atlas Investissement S.A.S,
a simplified joint-stock company (société par actions simplifiée), having its registered office at 16 Rue
de la Ville-l’Évêque, FR-75008 Paris, France, with corporate registration number 908 070 188 with the Paris Trade and
Companies Registry (R.C.S Paris) (“Parent”). Parent is a majority owned subsidiary of NJJ Holding S.A.S., a
simplified joint-stock company (société par actions simplifiée) domiciled in Paris, France, wholly owned by
Xavier Niel (“NJJ” and, together with Purchaser, Parent and Xavier Niel, the “Purchaser Group”).
Pursuant to a Tender Offer Statement and Rule 13e-3
Transaction Statement filed under cover of Schedule TO filed with the Securities and Exchange Commission (“SEC”)
on July 1, 2024 (together with any amendments or supplements thereto, the “Schedule TO”) by the Purchaser Group
and Maxime Lombardini, the Non-Executive Director, President and Chief Operating Officer of the Company, as well as Vice-Chairman of the
Board of Directors of Iliad Group (an affiliate of Purchaser and Parent) (together with the Purchaser Group, the “Filing Parties”),
Purchaser has offered to purchase, through separate but concurrent offers in Sweden (the “Swedish Offer”) and the United
States (the “US Offer” and, together with the Swedish Offer, the “Offers”), all of the issued and
outstanding common shares (CUSIP L6388F110), par value $1.50 per share (each, a “Common Share” and, collectively, the
“Common Shares”), including Swedish Depositary Receipts (ISIN: SE0001174970) representing Common Shares (each of which
represents one Common Share) (each, an “SDR” and, collectively, the “SDRs” and, together with the
Common Shares, the “Shares”), of the Company that are not already owned by the Purchaser Group and its affiliates,
for $24.00 per Common Share and $24.00 per SDR (each such amount, as adjusted for certain dividends pursuant to the terms set forth in
the Offers, and with respect to the Swedish Offer, as converted into SEK based on a USD/SEK exchange rate as close to the settlement date
of the Swedish Offer as Purchaser is able to achieve, the “Offer Price”), upon the terms and subject to the conditions
set forth in the Offer to Purchase attached as Exhibit (a)(1)(A) to the Schedule TO (together with any amendments or supplements thereto,
the “Offer to Purchase”) and in the related letter of transmittal and other transmittal documents filed as exhibits
to the Schedule TO (the “Transmittal Documents”).
References in this Schedule 14D-9 to the Company’s
“shareholders” include both holders of Common Shares and holders of SDRs unless otherwise specified.
AS FURTHER DISCUSSED IN ITEM 4 (“THE
SOLICITATION OR RECOMMENDATION—REASONS FOR THE RECOMMENDATION”) BELOW, THE INDEPENDENT COMMITTEE OF THE COMPANY’S
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE COMPANY’S SHAREHOLDERS REJECT THE OFFERS AND NOT TENDER THEIR SHARES
PURSUANT TO THE OFFERS, INCLUDING FOR THE FOLLOWING REASONS:
| · | the Offer Price significantly undervalues the Company, including based on the following considerations
(subject to the qualifications and limitations described in “Item 4. The Solicitation or Recommendation—Reasons for the
Recommendation” and “Item 8. Additional Information”): |
| o | the Offer Price does not adequately take into account expectations based on the Company’s long-range
plan that the Company will generate Equity free cash flow(1) of $659 million, $701 million and $833 million in 2024, 2025 and
2026, respectively; |
| o | the Offer Price does not adequately take into account that, as previously announced and based on results
through mid-June 2024, the Company’s Equity free cash flow(1) for full year 2024 is expected to be above $600 million
and the Company’s Leverage(1) is expected to end 2024 near the intermediate term target of 2.5x; |
(1) Equity free cash flow
and Leverage are non-IFRS measures. Please see “Item 8. Additional Information — Use of Non-IFRS Terms”
for more information on these measures.
| · | the Offer Price is well below trading multiples for comparable listed companies: |
| o | while
the average 2024 enterprise value to operating cash flow multiple of the Company’s
Trading Peers1 is 7.4x, the Offer Price represents a 37.3% discount to the price
per Share implied by applying the same multiple to the Company; and |
| o | while the average Equity free cash flow yield of the Company’s Trading Peers is 10.5%, the Offer
Price represents a 30.1% discount to the price per Share implied by applying the same yield to the Company; |
| · | the Offer Price represents a discount to the most recent closing price of the Shares and the
closing prices of the Shares on certain other key dates: |
| o | a discount of 2.2% to the closing price of $24.55 per Common Share on June 28, 2024, the last full trading
day prior to the announcement of the Offers; |
| o | a discount of 0.3% to the volume weighted average price of $24.07 per Common Share for the 30-day trading
period ending on June 28, 2024, the last full trading day prior to the announcement of the Offers; and |
| o | a discount of 3.1% to the closing price of $24.78 per Common Share on July 12, 2024, the last full trading
day prior to the filing of this Schedule 14D-9; |
| · | the average control premia to undisturbed prices observed in all-cash technology, media, and telecommunications
(“TMT”) transactions involving targets that are considered to be large publicly listed companies in the United States
and Europe over the past 15 years range between 17.4% and 46.4%, while the Offer Price represents a mere 1.8% premium to the closing price
of $23.58 per Common Share on May 22, 2024, the last full trading day prior to Purchaser issuing a press release announcing that it was
exploring a potential all cash tender offer for the Shares; |
| · | if Purchaser waives the “95% minimum tender condition”
applicable to the Offers and the Offers are accepted only to such extent that Purchaser becomes the owner of Shares representing at
least 331⁄3% of the Company’s outstanding Shares (being the “mandatory bid threshold”
under Luxembourg law), the Purchaser Group could continue to purchase Shares in the open market without having paid a control
premium to shareholders who have tendered their Shares in the Offers or ever paying a control premium in the future; |
| · | if Purchaser acquires additional Shares in the Offers and increases its ownership of the Company and
exercises its ability to waive the “95% minimum tender condition” applicable to the Offers, liquidity of the Shares may be
reduced, which could have an adverse effect on the Company’s stock price and could jeopardize the existence of an active trading
market for the Shares; and |
| · | Purchaser states in the Offer to Purchase that it reasonably believes that the Offer Price “is
fair to [u]naffiliated [s]hareholders seeking immediate liquidity”, while the Independent Committee evaluated and bases its recommendation
on whether the Offer Price is fair to all of the Company’s unaffiliated shareholders. |
1 “Trading
Peers” include: Liberty Latin America Ltd. (LILA), America Movil S.A.B. de C.V. (AMX), Telefonica Brasil S.A. (VIVT3), and TIM
Brasil Serviços e Participações S.A. (TIMS3). Entel S.A. (ENTEL) is not considered a relevant trading peer because
of its lower profitability margins as a result of a different business model and product mix, as well as lower trading liquidity.
ITEM 1. SUBJECT COMPANY INFORMATION
Name and Address
The name of the Company, as the subject company
to which this Schedule 14D-9 relates, and the address and telephone number of its principal executive offices are:
Millicom International Cellular S.A.
2, Rue du Fort Bourbon
L-1249 Luxembourg
Grand Duchy of Luxembourg
+352 691 750 960
Securities
The title of the subject class of equity securities
to which this Schedule 14D-9 relates is the Company’s common shares (CUSIP L6388F110), par value $1.50 per share, including Swedish
Depositary Receipts (ISIN: SE0001174970) representing Common Shares (each of which represents one Common Share). As of the close of business
on July 5, 2024, the most recent practicable date prior to the filing of this Schedule 14D-9, there were 172,096,305 Shares issued (including 821,489 Common Shares and/or SDRs held in treasury by the Company).
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON
Name and Address
The filing person is the Company. The name, business
address and business telephone number of the Company are set forth in the section entitled “Item 1. Subject Company Information — Name
and Address” above and are incorporated herein by reference.
The Company is making certain information relating
to the Offers available on its website at https://www.millicom.com/investors/public-offer. The information on the Company’s website
should not be considered a part of this Schedule 14D-9 and, except as expressly stated in this Schedule 14D-9, is not incorporated herein
by reference.
Tender Offers
The information set forth in this Schedule 14D-9
under the heading “Introduction” above is incorporated herein by reference.
This Schedule 14D-9 relates to the Offers by Purchaser
for all of the Shares at the Offer Price, upon the terms and subject to the conditions set forth in the Offer to Purchase and Transmittal
Documents.
In the US Offer, the Offer Price of $24.00 per
Common Share is payable net to the seller in cash, without interest, less any withholding taxes that may be applicable. In the Swedish
Offer, settlement will be made in SEK and the Offer Price of $24.00 per SDR will be converted into SEK in connection with settlement,
as further described in the Offer to Purchase.
Under the terms of the Offers, if the Company,
prior to the settlement of the Offers, distributes dividends or in net to the seller any other way distributes or transfers value to the
Company shareholders, the Offer Price will be adjusted accordingly. No fraction of a Share will be purchased from any holder, and all
payments to tendering holders of Shares pursuant to the Offers will be rounded to the nearest whole cent or rounded off to two decimal
points of SEK, as applicable.
The terms of the US Offer and the Swedish Offer
are substantially the same, subject to the limited differences described in the Offer to Purchase, such as that persons tendering SDRs
in the Swedish Offer will receive consideration denominated in SEK and persons tendering into the US Offer will receive consideration
denominated in USD.
The initial acceptance period for the Offers (the
“Offer Period”) commenced on July 1, 2024 and is scheduled to expire at one minute after 10:59 a.m. EST, or one minute
after 4:59 p.m. CEST, on August 16, 2024, unless the Offer Period is extended (the end of the Offer Period, as it may be extended, the
“Expiration Time”). The Purchaser has reserved the right to extend the Offer Period and to postpone the settlement
date.
The US Offer and the Swedish Offer are subject
to the same conditions for consummation. According to the Schedule TO, the consummation of the Offers is subject to the following seven
conditions precedent:
| 1. | the Offers being accepted to such extent that Purchaser becomes the owner of Shares representing 95% or
more of the Shares, excluding 840,641 Shares held in treasury by the Company (the “Minimum Tender Condition”); |
| 2. | no other party announcing an offer to acquire Shares on terms that are more favorable to the Company’s
shareholders than the Offers; |
| 3. | with respect to the Offers and completion of the acquisition of the Company, receipt of all necessary
regulatory, governmental or similar clearances, approvals, decisions and other actions from authorities or similar, including from competition
authorities, being obtained, in each case on terms which, in Purchaser’s opinion, are acceptable; |
| 4. | neither the Offers nor the acquisition of the Company being rendered wholly or partially impossible or
significantly impeded as a result of legislation or other regulation, any decision of a court or public authority, or any similar circumstance; |
| 5. | no circumstances having occurred which could have a material adverse effect or could reasonably be expected
to have a material adverse effect on the Company’s financial position or operations, including the Company’s sales, results,
liquidity, equity ratio, equity or assets; |
| 6. | no information made public by the Company, or otherwise made available to Purchaser by the Company, being
inaccurate, incomplete or misleading, and the Company having made public all information which should have been made public; and |
| 7. | the Company not taking any action that is likely to impair the prerequisites for making or completing
the Offers. |
Purchaser has reserved the right to withdraw the
Offers in the event that it is clear that any of the above conditions are not satisfied or cannot be satisfied. However, under the Takeover
rules for Nasdaq Stockholm and Nordic Growth Market NGM (the “Swedish Takeover Rules”), with regard to each of
conditions 2–7 above, the Offers may only be withdrawn where the non-satisfaction of such condition is of material importance to
Purchaser’s acquisition of the Company or if otherwise approved by the Swedish Securities Council.
Additionally, Purchaser has reserved the right
to waive, in whole or in part, one, several or all of the conditions to the consummation of the Offers set forth above, including, with
respect to the Minimum Tender Condition, to complete the Offers at a lower level of acceptance.
According to the Schedule TO, if the conditions
for completion of the Offers are satisfied and the Offers are successful, following consummation of the Offers and to the extent legally
permitted by applicable law, Purchaser currently intends to delist the Common Shares from the Nasdaq Stock Market and the SDRs from Nasdaq
Stockholm, Large Cap, to terminate registration of the Common Shares under Section 12(g)(4) of the Securities Exchange Act of 1934 (as
amended, the “Exchange Act”) and to suspend the Company’s reporting obligations under Section 15(d) of the Exchange
Act (collectively the “Suspension”).
According to the Schedule TO, the address of Purchaser
is 53, boulevard Royal, L-2449 Luxembourg, Luxembourg and the address of each other member of the Purchaser Group is 16 Rue de la Ville-l’Évêque,
FR-75008 Paris, France.
The foregoing summary of the terms and conditions
of the Offers does not purport to be complete and is qualified in its entirety by reference to the contents of the Offer to Purchase,
the Schedule TO and the Transmittal Documents. The Company takes no responsibility for (i) the accuracy or completeness of any information
described in this Schedule 14D-9 that is contained in, or otherwise incorporated by reference to, the Offer to Purchase, the Schedule
TO or the Transmittal Documents, (ii) any information set forth in the Offer to Purchase, the Schedule TO or the Transmittal Documents
or (iii) any failure by the Filing Parties to disclose events or circumstances that may have occurred and may affect the significance,
accuracy or completeness of any such information.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
According to the Schedule TO, as of July 1, 2024,
the Purchaser Group owned 49,966,734 Shares (composed entirely of SDRs), which represent approximately 29.03% of the share capital and
the total number of votes in the Company (based on there being 172,096,305 Shares issued).
The information set forth in the sections of the
Offer to Purchase entitled “Special Factors — Certain Agreements between Parent and its Affiliates and Millicom”,
“Special Factors — Interests of Certain Millicom Directors and Executive Officers in the Offers”
and “The Tender Offers — Certain Information Concerning Millicom — Millicom’s Board
of Directors, Group Management and Auditor” is incorporated herein by reference.
Additionally, the information set forth in the
sections in the Company’s annual report on Form 20-F for the fiscal year ended December 31, 2023, filed with the SEC on March 12,
2024 (the “Annual Report”), entitled “Item 6.A.: Directors and Senior Management”, “Item
6.B.: Compensation”, “Item 6.C.: Board Practices”, “Item 7.A.: Major Shareholders” and
“Item 7.B.: Related Party Transactions” is incorporated herein by reference.
Except as set forth or incorporated by reference
in this Schedule 14D-9, to the knowledge of the Company, as of the date of this Schedule 14D-9, there are no material agreements, arrangements
or understandings, nor any actual or potential conflicts of interest, between the Company or any of its affiliates, on the one hand, and
(i) any of the Company’s executive officers, directors or affiliates or (ii) Purchaser or any of its respective executive
officers, directors or affiliates, on the other hand.
Independent Committee
The Purchaser Group holds substantial ownership
of the Company and certain members of the Company’s board of directors (the “Board”) are executive officers,
directors or affiliates of the Purchaser Group. Accordingly, on May 23, 2024, the Board formed an independent committee (the “Independent
Committee”), comprised of Mauricio Ramos (the Chair of the Board), Maria Teresa Arnal, Bruce Churchill, Justine Dimovic, Tomas
Eliasson and Blanca Treviño de Vega (i.e., all of the members of the Board except for Aude Durand, Maxime Lombardini and Thomas
Reynaud, who are executive officers, directors or affiliates of the Purchaser Group (collectively, the “Atlas Directors”)),
to, among other things, manage all matters on behalf of the Company related to the Offers. The Independent Committee was aware of the
agreements and arrangements described (and incorporated by reference) in this Item 3 during its deliberations with respect to the Offers
and in determining to make the recommendation set forth in this Schedule 14D-9.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
Recommendation of the Independent Committee
After careful discussion and consideration, including
review of the terms of the Offers in consultation with the Company Financial Advisors and Nordea (each as defined below), the Independent
Committee unanimously determined that the Offers significantly undervalue the Company and are not in the best interests
of the Company and its shareholders.
ACCORDINGLY, AS FURTHER DISCUSSED BELOW UNDER
THE HEADING “ — REASONS FOR THE RECOMMENDATION”, THE INDEPENDENT COMMITTEE UNANIMOUSLY RECOMMENDS THAT THE COMPANY’S
SHAREHOLDERS REJECT THE OFFERS AND NOT TENDER THEIR SHARES PURSUANT TO THE OFFERS, INCLUDING FOR THE FOLLOWING REASONS:
| · | the Offer Price significantly undervalues the Company, including based on the following considerations
(subject to the qualifications and limitations described below under the heading “ — Reasons for the Recommendation”
and “Item 8. Additional Information”): |
| o | the Offer Price does not adequately take into account expectations based on the Company’s long-range
plan that the Company will generate Equity free cash flow(1) of $659 million, $701 million and $833 million in 2024, 2025 and
2026, respectively; |
| o | the Offer Price does not adequately take into account that, as previously announced and based on results
through mid-June 2024, the Company’s Equity free cash flow(1) for full year 2024 is expected |
to be above $600 million and the Company’s
Leverage(1) is expected to end 2024 near the intermediate term target of 2.5x;
(1) Equity free cash flow
and Leverage are non-IFRS measures. Please see “Item 8. Additional Information — Use of Non-IFRS Terms”
for more information on these measures.
| · | the Offer Price is well below trading multiples for comparable listed companies: |
| o | while
the average 2024 enterprise value to operating cash flow multiple of the Company’s
Trading Peers2 is 7.4x, the Offer Price represents a 37.3% discount to the price
per Share implied by applying the same multiple to the Company; and |
| o | while the average Equity free cash flow yield of the Company’s Trading Peers is 10.5%, the Offer
Price represents a 30.1% discount to the price per Share implied by applying the same yield to the Company; |
| · | the Offer Price represents a discount to the most recent closing price of the Shares and the
closing prices of the Shares on certain other key dates: |
| o | a discount of 2.2% to the closing price of $24.55 per Common Share on June 28, 2024, the last full trading
day prior to the announcement of the Offers; |
| o | a discount of 0.3% to the volume weighted average price of $24.07 per Common Share for the 30-day trading
period ending on June 28, 2024, the last full trading day prior to the announcement of the Offers; and |
| o | a discount of 3.1% to the closing price of $24.78 per Common Share on July 12, 2024, the last full trading
day prior to the filing of this Schedule 14D-9; |
| · | the average control premia to undisturbed prices observed in all-cash TMT transactions involving targets
that are considered to be large publicly listed companies in the United States and Europe over the past 15 years range between 17.4% and
46.4%, while the Offer Price represents a mere 1.8% premium to the closing price of $23.58 per Common Share on May 22, 2024, the last
full trading day prior to Purchaser issuing a press release announcing that it was exploring a potential all cash tender offer for the
Shares; |
| · | if Purchaser waives the “95% minimum tender condition”
applicable to the Offers and the Offers are accepted only to such extent that Purchaser becomes the owner of Shares representing at
least 331⁄3% of the Company’s outstanding Shares (being the “mandatory bid threshold” under Luxembourg law), the
Purchaser Group could continue to purchase Shares in the open market without having paid a control premium to shareholders who have
tendered their Shares in the Offers or ever paying a control premium in the future; |
| · | if Purchaser acquires additional Shares in the Offers and increases its ownership of the Company and
exercises its ability to waive the “95% minimum tender condition” applicable to the Offers, liquidity of the Shares may be
reduced, which could have an adverse effect on the Company’s stock price and could jeopardize the existence of an active trading
market for the Shares; and |
| · | Purchaser states in the Offer to Purchase that it reasonably believes that the Offer Price “is
fair to [u]naffiliated [s]hareholders seeking immediate liquidity”, while the Independent Committee evaluated and bases its
recommendation on whether the Offer Price is fair to all of the Company’s unaffiliated shareholders. |
Please see “ — Reasons for the
Recommendation” below for further detail.
2
“Trading Peers” include: Liberty Latin America Ltd. (LILA), America Movil S.A.B. de C.V. (AMX), Telefonica Brasil S.A.
(VIVT3), and TIM Brasil Serviços e Participações S.A. (TIMS3). Entel S.A. (ENTEL) is not considered a relevant trading
peer because of its lower profitability margins as a result of a different business model and product mix, as well as lower trading liquidity.
The Company’s shareholders can withdraw
some or all of any Shares that they previously tendered into the Offers not later than one minute after 10:59 a.m. EST, or one minute
after 4:59 p.m. CEST, on August 16, 2024 (i.e., the Expiration Time); provided that, exclusively in connection with
the Swedish Offer, Purchaser has not announced that the conditions for completion of the Offers have been fulfilled. If the conditions
for completion of the Offers, which Purchaser has reserved the right to waive, have not been satisfied or waived and remain during an
extension of the Offers, the right to withdraw an acceptance will apply in the same manner throughout any such extension of the Offers.
For assistance in withdrawing Shares, the Company’s
shareholders can contact their broker or the Company’s investor relations department at the following contact information:
Michel Morin, VP Investor Relations
investors@millicom.com
A copy of the press release relating to the recommendation
of the Independent Committee that the Company’s shareholders reject the Offers and not tender their
Shares pursuant to the Offers is filed as Exhibit (a)(5)(A) to this Schedule 14D-9 and is incorporated herein by reference.
Background of the Offers
The following chronology summarizes certain
key events related to the Offers. The following chronology does not purport to catalogue every conversation by, of or among the members
of the Board or Independent Committee, members of the Purchaser Group, the Company’s representatives, the Purchaser Group’s
representatives and/or any other parties. The information set forth in the section of the Offer to Purchase entitled “Special
Factors—Background” is incorporated herein by reference.
On November 4, 2022, Parent issued a press release
confirming that it held an approximately 7% interest in the Company and stated that it was supportive of the strategy the Company presented
in February 2022, the Board and the Company’s management team.
On February 24, 2023, Parent issued a press release
announcing that it held an approximately 20% interest in the Company through Purchaser.
On May 23, 2024, Parent sent the Board a non-binding
indication of interest (the “First Atlas Letter”) related to a potential all-cash offer for all of the Shares (including
Shares represented by SDRs) that Parent and its affiliates did not then currently own, for a purchase price of $24.00 per Common Share
(and the SEK equivalent per SDR). The proposal indicated that Parent had begun exploratory discussions with potential lenders to obtain
debt financing for the potential offer. Later that day, Parent publicly announced that it had sent the First Atlas Letter and that it
held an approximately 29.19% interest in the Company, and the Company publicly confirmed receipt of the First Atlas Letter.
At a meeting of the Board held on May 23, 2024,
the Board formed the Independent Committee.
On June 5, 2024, Parent and the Company entered
into a confidentiality agreement with Parent in connection with the potential offers.
On June 10, 2024, the Purchaser Group’s
outside counsel held a call with the Company’s Chief Legal and Compliance Officer and Davis Polk & Wardwell LLP (“Davis
Polk”), the Company’s counsel, to request certain additional information relating to regulatory approval matters in connection
with the potential offers.
On June 11, 2024, representatives of the Purchaser
Group, the Purchaser Group’s counsel and counsel to prospective lenders to the Purchaser Group held a call with the Company’s
Chief Financial Officer, the Company’s Treasurer, the Company’s Chief Legal and Compliance Officer and Davis Polk to request
certain additional information relating to the Company’s outstanding debt arrangements. Promptly following such call, the Company
provided the Purchaser Group and its counsel with access to a virtual data room containing certain legal documentation relating to such
debt arrangements.
On June 12, 2024, Parent sent the Board (i) a
letter (the “Second Atlas Letter”) confirming its intent to move forward with a “recommended”
voluntary all-cash tender offer at the same price indicated in the First Atlas Letter (less any dividend announced, resolved or paid,
and adjusted to reflect significant asset disposals or other significant transactions, prior to settlement of the offer) and (ii) an information
request list. The Second Atlas Letter noted that the proposed offer would be financed with up to $7.1 billion of debt provided by certain
banks pursuant to financing agreements, the main terms of which were agreed and the long-form documentation for which was well advanced.
The Second Atlas Letter stated that Parent expected to finalize all legal documentation required to launch its offer within three weeks
and that it was working toward announcing the offer by the end of June or early July. The Second Atlas Letter further requested that the
Company provide certain additional diligence materials.
On June 13, 2024, the Independent Committee met
to discuss the Second Atlas Letter. The Independent Committee unanimously believed that the proposal reflected in the Second Atlas Letter
significantly undervalued the Company. Over the course of June 13 through June 16, 2024, the Independent Committee regularly continued
to discuss how to best respond to the Second Atlas Letter, given that it specified that Parent’s intent was to move forward with
a “recommended” voluntary all-cash offer but neither (i) requested the Independent Committee’s recommendation
(or what would be required therefor) nor (ii) suggested that the Purchaser Group was prepared to negotiate the Offer Price prior to launching
the Offers.
On June 18, 2024, Mauricio Ramos, on behalf of
the Independent Committee, sent a letter to Parent stating that Parent’s proposed offer price significantly undervalued the Company
and further informed Parent that, given that Parent had neither raised its intended offer price nor indicated that it might raise its
intended offer price despite the diligence materials and calls held with the Company’s management (which were limited and did not
contain inside information), that the Independent Committee did not see a basis to provide any further diligence access to the Purchaser
Group at that time. The letter also described additional information the Independent Committee would require should Parent wish to submit
a revised proposal for the Independent Committee’s consideration.
On June 19, 2024, Parent, through its financial
advisor, requested a meeting with the Independent Committee to occur during the following week.
On June 25, 2024, the Independent Committee held
a meeting at which representatives of Goldman Sachs International (“Goldman Sachs”) and Morgan Stanley & Co. International
plc (“Morgan Stanley” and, together with Goldman Sachs, the “Company Financial Advisors”), each
in their capacity as financial advisors to the Company, and Davis Polk were present. The Independent Committee discussed Purchaser’s
intended offer price with the Company Financial Advisors. The Independent Committee unanimously reaffirmed its belief that Parent’s
proposed offer price significantly undervalued the Company.
On June 26, 2024, at Purchaser’s request,
certain members of the Independent Committee held a meeting with representatives of the Purchaser Group to discuss the proposed offer.
At the meeting, representatives of the Purchaser Group indicated that, despite the Independent Committee’s June 18, 2024 letter
to Parent stating the Independent Committee’s belief that Parent’s proposed offer price would significantly undervalue the
Company, Purchaser intended to move forward with the proposed offer in the near future and that the offer would be at a price of $24.00
per Common Share (and the SEK equivalent per SDR).
On June 27, 2024, the Independent Committee issued
a press release (the “June 27 Press Release”) announcing (i) that it anticipated the Purchaser Group would launch an
all-cash tender offer in the near term at a price of $24.00 per Common Share (and the SEK equivalent per SDR), notwithstanding the fact
that the Independent Committee had previously informed the Purchaser Group that the Independent Committee unanimously believed that such
an offer price would significantly undervalue the Company, and (ii) in light of the anticipated tender offer, and to support the Company’s
shareholders in evaluating such tender offer, based on the Company’s preliminary review of financial performance for the second
quarter of 2024 (which then continued, and still continues, to be subject to review by the Company’s management and auditor), the
Independent Committee’s expectations as to certain financial performance (as discussed below).
On July 1, 2024, contrary to Purchaser’s
stated intent in the Second Atlas Letter to pursue a “recommended” offer, Purchaser launched the Offers by issuing a press
release (and subsequently on the same day obtained approval of the Offer to Purchase from the Swedish Financial Supervisory Authority)
and filed with the SEC the Schedule TO.
On July 6, 2024, Nordea Bank Abp, filial i Sverige,
Corporate Finance (“Nordea”) was engaged to provide an opinion to the Independent Committee in accordance with the
Swedish Takeover Rules as to whether the offer price of $24.00 per Common Share and per SDR was fair, from a financial point of view,
for the holders of Common Shares and SDRs (other than the Purchaser and its affiliates). Nordea is considered to be independent for purposes
of, and as defined in, the Swedish Takeover Rules.
On July 12, 2024, the Independent Committee held
a meeting at which Nordea rendered an oral opinion, subsequently confirmed in writing, to the effect that, as of July 12, 2024, and based
upon and subject to the matters considered, the procedures followed, the assumptions made and various limitations of and qualifications
to the review undertaken set forth in its written opinion, the offer price of $24.00 per Common Share and per SDR was not fair, from a
financial point of view, for the holders of Shares (other than the Purchaser and its affiliates). The full text of the written opinion
of Nordea, dated July 12, 2024, which sets forth the matters considered, the procedures followed, the assumptions made and various limitations
of and qualifications to the review undertaken in connection with such opinion, is filed as Exhibit (a)(5)(C) to this Schedule 14D-9 and
is also attached to the statement of the Independent Committee made under the Swedish Takeover Rules (the “Swedish Recommendation
Statement”) filed as Exhibit (a)(2)(A) to this Schedule 14D-9. For further details on Nordea’s opinion, please see “Item
4. The Solicitation or Recommendation — Reasons for the Recommendation”.
Following Nordea’s delivery of its oral
opinion, at meetings of the Independent Committee held on July 12, 2024 and July 15, 2024, the Independent Committee further discussed
and considered the terms of the Offers and, after careful discussion and consideration, the Independent Committee unanimously determined
that the Offers significantly undervalue the Company and are not in the best interests of the Company and its shareholders.
On July 15, 2024, the Company issued the Swedish
Recommendation Statement by way of a press release, filed this Schedule 14D-9 with the SEC and issued a press release summarizing the
filing of this Schedule 14D-9 and the Independent Committee’s recommendation that the Company’s shareholders reject
the Offers and not tender their Shares pursuant to the Offers.
Reasons for the Recommendation
FOR THE REASONS SET FORTH BELOW, THE INDEPENDENT
COMMITTEE UNANIMOUSLY RECOMMENDS THAT THE COMPANY’S SHAREHOLDERS REJECT THE OFFERS AND NOT TENDER THEIR SHARES PURSUANT
TO THE OFFERS.
In evaluating the Offers, the Independent Committee
consulted with the Company’s management, as well as with the Company Financial Advisors, Nordea (which was engaged to provide an
opinion to the Independent Committee in accordance with the Swedish Takeover Rules as to whether the offer price of $24.00 per Common
Share and per SDR was fair, from a financial point of view, for the holders of Common Shares and SDRs (other than the Purchaser and its
affiliates)) and the Independent Committee’s counsel, Davis Polk, Nord Advokater KB and Advokatfirman Lindahl (with respect to Swedish
legal matters) and Hogan Lovells (Luxembourg) LLP (with respect to Luxembourg legal matters).
The Independent Committee conducted an overall
assessment and reviewed, considered and evaluated a significant amount of information and factors, including potential benefits, detriments
and implications of the Offers to the Company and its shareholders that the Independent Committee considered relevant for its evaluation
of the Offers. These factors included, but were not limited to, the current and historic market prices of the Shares, prevailing market
conditions and opportunities and challenges in each market in which the Company operates, the Company’s strategic options and the
Company’s expected future development and financial performance, as well as opportunities and risks related to the foregoing.
Further, and without limitation, the Independent
Committee, in consultation with the Company’s management, the Company Financial Advisors and Nordea, analyzed the Offers using certain
methods typically used for evaluating tender offers for publicly listed companies, including the implied valuation of the Company in the
Offers relative to comparable publicly listed companies, the Offer Price relative to the price per share paid in comparable transactions,
premia that were applicable in previous tender offers for comparable publicly listed companies, the Independent Committee’s belief
of the stock market’s expectations in respect of the Company and the Independent Committee’s view of the Company’s long-term
value, including based on the Company’s long-range plan and expected future cash flows.
The Independent Committee believes that, taken
as a whole, the following factors support the Independent Committee’s decision to recommend that the Company’s shareholders
reject the Offers and not tender their Shares pursuant to the Offers:
| · | The Offer Price Significantly Undervalues the Company, Including Based on the Following Considerations: |
| o | The Offer Price Does Not Adequately Take Into Account Expectations Based on the Company’s
Long-Range Plan That the Company Will Generate Equity Free Cash Flow(1) of $659 Million, $701 Million and $833
Million in 2024, 2025 and 2026, Respectively. |
In evaluating
the Offers and in the course of its deliberations leading to the determination to recommend that the shareholders of the Company reject
the Offers and not tender their Shares pursuant to the Offers, the Independent Committee discussed with the Company’s
management its most updated long-range plan for the Company (the “Long-Range Plan”) (which continues to be subject
to review by the Company’s management and auditor), including the Company’s anticipated cash flow generation contemplated
thereby, and which was based, in part, on the 2024Q2 Preliminary Financial Review (as defined below).
Accordingly,
in connection with the Offers, and to support the Company’s shareholders in evaluating the Offers and the Independent Committee’s
recommendation, the Independent Committee observes that the Long-Range Plan presently indicates the following expectations for the Company’s
2024 through 2026 fiscal years (the “Long-Range Plan Expectations”):
($ in millions) |
2024E |
2025E |
2026E |
Equity free cash flow(1) |
659 |
701 |
833 |
Leverage(1) |
2.4x |
1.9x |
1.5x |
(1) Equity
free cash flow and Leverage are non-IFRS measures. Please see “Item 8. Additional Information — Use of Non-IFRS
Terms” for more information on these measures.
The Long-Range
Plan Expectations are underpinned by, among other things, recent cash flow outperformance (as announced in the June 27 Press Release and
discussed below) and expected near-term cash flow improvement. While the Company has gone through a period of constrained cash flows over
the last several years, given meaningful investments made by the Company in its business activities, including with respect to spectrum,
capital expenditures and recent internal restructurings, the Company’s management believes this investment period is nearing conclusion
and expects the Company’s cash flow generation to significantly increase over the coming years as reflected in the Long-Range Plan.
However, the Long-Range Plan Expectations assume that no capital allocation activities or transactions, including distributions of dividends,
share repurchases, strategic transactions or similar activities or transactions, have been undertaken by the Company in the relevant period(s).
Accordingly,
taking into account risk-adjusted value, potential benefits, risks and uncertainties that may ultimately impact the accuracy of the Long-Range
Plan, and subject to further changes in the Company’s business, assets, liabilities, financial condition, results of operations,
management, competitive position, prospects and operating plans, as well as industry, economic and stock and credit market conditions,
the Independent Committee believes that the intrinsic valuation of the Company implied by the Long-Range Plan is more favorable to the
Company’s shareholders than the valuation implied by the Offer Price.
Note that the
Company’s actual future financial results may differ materially from those expressed in the Long-Range Plan due to numerous factors,
including many that are beyond the Company’s ability to control or predict. The above information about the Long-Range Plan should
be read in light of the important disclosures set forth in “Item 8. Additional Information — Cautionary Statement”
and “Item 8. Additional Information — Forward-Looking Statements”.
| o | The Offer Price Does Not Adequately Take Into Account That, As Announced Previously and Based on
Results Through Mid-June 2024, the Company’s Equity Free Cash Flow(1) for 2024 Is Expected to Be Above
$600 Million. |
The Long-Range
Plan Expectations, and in particular the expectations regarding future cash flow, are supported by the Independent Committee’s prior
announcement in the June 27 Press Release that, based on the preliminary review and report by the Company’s management of the Company’s
financial performance for the second quarter of 2024 (which continues to be subject to review by the Company’s management and auditor)
(the “2024Q2 Preliminary Financial Review”), the Independent Committee expects (the “Preliminary 2024 Expectations”):
| § | the Company’s Equity free cash flow(1) for full year 2024 will be above $600 million,
based on results through mid-June 2024 and taking into account potential risks that may impact performance (with this expectation not
including the Company’s prior receipt of $46 million of net proceeds from its previously announced Colombia tower sale); and |
| § | the Company’s Leverage(1) will end 2024 near the intermediate term target of 2.5x. |
The Preliminary
2024 Expectations also exclude proceeds that may be obtained from any future tower monetization. The Company has entered into exclusive
negotiations regarding a sale and leaseback of a large portion of its tower portfolio.(2)
(1) Equity
free cash flow and Leverage are non-IFRS measures. Please see “Item 8. Additional Information — Use of Non-IFRS
Terms” for more information about these measures.
(2) At
this stage, it is not possible to say that a transaction is likely to materialize or to make any statement on the terms, timing or form
of any potential transaction.
| o | The Offer Price Is Well Below Trading Multiples for Comparable Listed Companies. |
Relevant trading
multiples, such as 2024 enterprise value to operating cash flow (“EV/OCF”) and the 2024 expected Equity free cash flow
yield (defined as Equity free cash flow divided by market capitalization) (“EFCF yield”), which are commonly used by
market participants to ascertain the value of telecommunications companies based on their proximity to cash flow generation vis-à-vis
other trading metrics, do not support the valuation of the Company implied by the Offer Price.
| § | The average EV/OCF multiple of the Company’s Trading Peers is 7.4x. The Offer Price represents a
37.3% discount to the price per Share implied by applying the same multiple to the Company.(1) |
| § | The average EFCF yield of the Company’s Trading Peers is 10.5%. The Offer Price represents a 30.1%
discount to the price per Share implied by applying the same yield to the Company.(1) |
(1) Comparable
multiples and yields are calculated on a proportionate basis, i.e., accounting for Operating cash flow and Equity free cash flow as per
the Company’s definitions at each subsidiary level and adding it pro rata to the Company’s ownership in each subsidiary. Please
see “Item 8. Additional Information — Use of Non-IFRS Terms”.
| o | The Offer Price Represents a Discount to Closing Prices of the Shares on Certain Key Dates. |
The Offer Price
represents a discount of:
| § | 2.2% to the closing price of $24.55 per Common Share (or 1.4% to the closing price of SEK 258.0 per SDR,
converted at a USD/SEK exchange rate of 10.60) on June 28, 2024, the last full trading day prior to the announcement of the Offers; |
| § | 0.3% to the volume weighted average price of $24.07 per Common Share (or 0.2% to the volume weighted average
price of SEK 252.7 per SDR, converted at an observed USD/SEK exchange rate of 10.51) for the 30-day trading period ending on June 28,
2024, the last full trading day prior to the announcement of the Offers; and |
| § | 3.1% to the closing price of $24.78 per Common Share (or 2.3% to the closing price of SEK 258.8 per SDR,
converted at a USD/SEK exchange rate of 10.53) on July 12, 2024, the last full trading day prior to the filing of this Schedule 14D-9. |
The
trading price of the Shares has remained above the Offer Price (in both USD per Common Share and SEK per SDR) ever since the Offers were
launched on July 1, 2024, and through July 12, 2024, suggesting that, for so long as trading prices remain higher than the Offer Price,
shareholders who wish to sell their Shares may be able to do so in the market and obtain a higher price and a quicker and more certain
settlement than they would by tendering their Shares pursuant to the Offers.3
| o | The Offer Price Does Not Reflect a Reasonable Control Premium Consistent with Comparable Transactions. |
The Offer Price
represents a mere 1.8% premium to the closing price of $23.58 per Common Share (or a 2.4% premium to the closing price of SEK 251.6 per
SDR, converted at an assumed USD/SEK exchange rate of 10.73) on May 22, 2024, the last full trading day prior to Purchaser issuing a press
release announcing that it was exploring a potential all cash tender offer for the Shares.
However, relative
to undisturbed prices observed in all-cash TMT transactions involving targets that are considered to be large publicly listed companies
in the United States and Europe (i.e., publicly listed companies with over $1.0 billion of estimated enterprise value) over the past 15
years:
| § | average
control premia range between 17.4% and 46.4%;4 |
| § | the median control premium is 28.9%. |
| o | The Potential Value of Ongoing and Potential Strategic Transactions and Alternatives, Including
That the Company May Evaluate Whether to Distribute Dividends and/or Implement a Share Repurchase Program or Otherwise Return Capital
to Its Shareholders, Further Supports That the Offer Price Significantly Undervalues the Company. |
The Company has
been, in the ordinary course of its business, considering various strategic transactions that may materialize in the future and result
in improvements to the Company’s cash flow generation (including further improvements that are currently not contemplated by the
Long-Range Plan).
Given the Long-Range
Plan Expectations, and in particular the Company’s expected anticipated cash flow generation, the Company may, between 2024 and
2026, have excess cash sufficient to distribute dividends and/or implement a share repurchase program. As a result, the Company may, as
part of its analysis of potential strategic transactions and alternatives, review the Company’s capital allocation framework and
evaluate whether to propose resuming or implementing, subject to obtaining all requisite approvals, a new share buyback program and/or
distribute to the Company’s shareholders all or a portion of excess capital generated by the Company. If the Company takes any such
action, it will have an impact on the Long-Range Plan Expectations.
3
This fact is included solely to describe one factor that supported the Independent Committee’s recommendation and constitutes
neither investment advice nor, in and of itself, a recommendation of the Independent Committee.
4
Range corresponds to the 25th and 75th percentile premia to undisturbed prices observed in transactions greater than $1.0 billion
enterprise value involving TMT companies publicly listed in the United States and Europe announced between January 2009 and May 2024.
Any determination
to distribute dividends, adopt share repurchase programs or otherwise remunerate shareholders in the future will be at the discretion
of the Board (as to interim dividends) and at the discretion of the Company’s shareholders at the annual general meeting upon recommendation
of the Board and will depend upon the Company’s ultimate actual results of operations, financial condition, distributable reserves,
contractual restrictions, restrictions imposed by applicable law and other factors the Board and the Company’s shareholders at an
annual general meeting, respectively, deem relevant. In addition, there can be no assurance that any future share repurchase program will
be fully consummated. The amount, timing and execution of any share repurchase program may fluctuate based on the Company’s priorities
for the use of cash or as a result of changes in cash flows, tax laws and the market price of the Shares.
| · | The Independent Committee Has Received an Opinion from Nordea Stating That, as of July 12, 2024,
and Based Upon and Subject to the Matters Considered, the Procedures Followed, the Assumptions Made and Various Limitations of and Qualifications
to the Review Undertaken Set Forth in Its Written Opinion, the Offer Price of $24.00 per Common Share and per SDR Is Not Fair, from a
Financial Point of View, for the Holders of Common Shares and SDRs (Other Than the Purchaser and Its Affiliates). |
The full text
of the written opinion of Nordea, dated July 12, 2024, which sets forth the matters considered, the procedures followed, the assumptions
made and various limitations of and qualifications to the review undertaken in connection with such opinion, is filed as Exhibit (a)(5)(C)
to this Schedule 14D-9 and is attached to the Swedish Recommendation Statement filed as Exhibit (a)(2)(A) to this Schedule 14D-9.
Nordea provided
its opinion solely for the information and assistance of the Independent Committee in connection with its consideration of the Offers.
Nordea’s opinion does not constitute a recommendation to any holder of Common Shares or SDRs in the Company as to whether or not
the holders of Common Shares and SDRs should accept the Offers or any other matter. Nordea’s opinion was provided under, and solely
for purposes of, the Swedish Takeover Rules and was prepared following customary Swedish standards and processes, which may differ from
those customarily followed in the United States or elsewhere.
| · | Purchaser States It Reasonably Believes the Offer Price Is Fair to Shareholders “Seeking Immediate
Liquidity,” While the Independent Committee Evaluated and Bases Its Recommendation on Whether the Offer Price Is Fair to All Shareholders. |
The Independent
Committee observed that the Purchaser Group expressly states in the Offer to Purchase that it reasonably believes that the Offer Price
“is fair to [u]naffiliated [s]hareholders seeking immediate liquidity” (emphasis added), but does not expressly
state that it reasonably believes the Offer Price is fair to all unaffiliated shareholders.
However, in
evaluating the Offers and in the course of its deliberations leading to the determination to recommend that the shareholders of the Company
reject the Offers and not tender their Shares pursuant to the Offers, the Independent Committee considered
whether the Offer Price is fair to all of the Company’s shareholders unaffiliated with the Purchaser Group.
| · | The Offers Could Preclude the Company’s Shareholders from
Receiving a Control Premium. The fact that if the Offers are completed, including if Purchaser waives the Minimum Tender
Condition and the Offers are accepted to such extent that Purchaser becomes the owner of Shares representing more than 50% of the
outstanding Shares, Purchaser would acquire control of the Company without paying a control premium. Even if Purchaser waives the
Minimum Tender Condition and the Offers are accepted only to such extent that Purchaser becomes the owner of Shares representing at
least 331⁄3% of the Company’s outstanding Shares (being the “mandatory bid threshold” under Luxembourg law), the
Purchaser Group could continue to purchase Shares in the open market without paying a control premium. There can be no assurance
that the Company would be able to take any action to prevent or hinder the Purchaser Group from acquiring additional Shares without
paying a control premium. |
| · | The Offers Could Deter Superior Offers. The fact that any increased ownership of the Company
by the Purchaser Group, even if the Minimum Tender Condition is waived, could significantly deter other parties potentially interested
in an acquisition of, or combination with, the Company from pursuing that opportunity, even if such parties would be willing to pay more
than the Offer Price. |
| · | The Offers Could Result in Purchaser Being a Majority Shareholder. The risk that if following
the Offers (including if Purchaser chooses to waive the Minimum Tender Condition but becomes the owner of Shares representing more than
50% of the Shares) Purchaser holds a majority of the voting rights in the Company, the Company would have a majority shareholder that
would be able to control certain matters requiring approval by the Company’s shareholders, including the election of directors and
other matters, and could approve or block corporate actions in ways that are contrary to the interests of the Company’s other shareholders. |
| · | The Offers Could Reduce Liquidity. The fact that, while the Schedule TO states that if Purchaser
holds securities representing not less than 95% of the capital carrying voting rights and 95% of the voting rights in the Company following
the Offers, Purchaser may request that the remaining Company shareholders transfer their Shares to Purchaser in exchange for a fair price
(as determined in accordance with applicable Luxembourg law) (a “Takeover Squeeze-Out”), Purchaser does not state in
the Schedule TO that it intends to effect or pursue a Takeover Squeeze-Out. If Purchaser completes the Suspension but does not exercise
a Takeover Squeeze-Out, it may be exceedingly burdensome for Company shareholders to sell their Shares, other than pursuant to a Takeover
Sell-Out (which would be available only if Atlas and its affiliates hold, as a result of the Offers, Shares constituting more than 90%
of the voting rights in the Company). Given the foregoing and Purchaser’s ability to waive the Minimum Tender Condition, the Offers
could, by further consolidating Purchaser’s ownership of the Company, reduce liquidity of the Shares, which could have an adverse
effect on the Company’s stock price and could jeopardize the existence of an active trading market for the Shares. |
| · | The Offers Are Conditional. The fact that the Offers are highly conditional (including the
fact that the Offers are subject to obtaining clearance under applicable antitrust laws in the U.S., Bolivia and Colombia) and the fact
that Purchaser has reserved the ability to waive the conditions to the Offers. All of the conditions to the Offers are for the sole benefit
of the Purchaser Group. Further, certain conditions involve a level of subjectivity, potentially allowing Purchaser to unilaterally determine,
correctly or incorrectly, that such conditions have not been met. |
In addition, the Independent Committee was aware
of and considered the interests that the Company’s directors and executive officers may have with respect to the Offers that differ
from, or are in addition to, the interests of the Company’s shareholders generally.
The foregoing discussion of the Independent Committee’s
reasons for its recommendation that the Company’s shareholders reject the Offers and not tender their
Shares pursuant to the Offers is not intended to be exhaustive, but the Independent Committee believes it includes all the material information
and factors considered by the Independent Committee. In view of the wide variety of factors considered in connection with its evaluation
of the Offers and the complexity of these matters, the Independent Committee did not consider it practicable to, and did not attempt to,
quantify or otherwise assign relative or specific weight or values to any of these factors. Rather, the Independent Committee based its
unanimous recommendation on an overall analysis and on the totality of the information presented to and factors considered by it. In addition,
in considering the factors described above, individual members of the Independent Committee may have given different weights to different
factors.
IN LIGHT OF THE FOREGOING, THE INDEPENDENT
COMMITTEE UNANIMOUSLY RECOMMENDS THAT THE COMPANY’S SHAREHOLDERS REJECT THE OFFERS AND NOT TENDER THEIR SHARES PURSUANT
TO THE OFFERS.
Certain of the Independent Committee’s reasons
for its recommendation and the explanation and related information set forth above in this section are forward-looking in nature and,
therefore, should be read in light of the important disclosures set forth in “Item 8. Additional Information — Cautionary
Statement” and “Item 8. Additional Information — Forward-Looking Statements”.
Intent to Tender
To the Company’s knowledge, after making
reasonable inquiry, the Company’s executive officers, directors, affiliates or subsidiaries currently intend to hold and not tender
any Shares held of record or beneficially owned by such persons, except for Thomas Reynaud, who the Company assumes, given his relationship
with the Purchaser Group, intends to tender, or cause to be tendered, all of the Shares he holds of record or beneficially owns pursuant
to the Offers.
ITEM 5. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED
Following the commencement of the Offers, Nordea
was engaged to provide an opinion to the Independent Committee in accordance with the Swedish Takeover Rules as to whether the offer price
of $24.00 per Common Share and per SDR was fair, from a financial point of view, for the holders of Common Shares and SDRs (other than
the Purchaser and its affiliates). In connection with its engagement, Nordea delivered an opinion, which is filed as Exhibit (a)(5)(C)
to this Schedule 14D-9, is attached to the Swedish Recommendation Statement filed as Exhibit (a)(2)(A) to this Schedule 14D-9 and is incorporated
herein by reference. In exchange for providing such opinion, Nordea will receive a fixed fee of $1,750,000, which became payable upon
delivery of the opinion and is payable whether or not the Offers are consummated and is not contingent upon the Offer Price or the level
of acceptance of the Offers by the Company’s shareholders. Nordea will also be reimbursed for certain expenses arising out of or
in connection with the engagement and will be indemnified against certain liabilities relating to or arising out of the engagement.
Goldman Sachs and Morgan Stanley are acting as
financial advisors to the Company. Each of Goldman Sachs and Morgan Stanley is being engaged to, among other things, provide analysis
and considerations of the Company’s response to the Offers. Goldman Sachs and Morgan Stanley were selected based on their respective
qualifications, expertise, reputation and relevant experience. The Company is negotiating engagement letters with each of Goldman Sachs
and Morgan Stanley under which it will pay each of them advisory fees and reimburse each of them for certain of their reasonable expenses
in connection with their engagements. The Company will also indemnify each of Goldman Sachs and Morgan Stanley against certain liabilities
relating to or arising out of their engagements.
Except as set forth above, neither the Company
nor any person acting on its behalf has or currently intends to employ, retain or compensate any person to make solicitations or recommendations
in connection with the Offers.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
Except as set forth in the table below, and except
as set forth in the Schedule TO under the section entitled “Item 8. Interest in Securities of the Subject Company”,
which section is incorporated herein by reference, no transactions with respect to the Common Shares or SDRs have been effected by the
Company or, to the knowledge of the Company after making reasonable inquiry, by any of its executive officers, directors, affiliates or
subsidiaries during the last 60 days prior to the date of this Schedule 14D-9.
Name of Person
Effecting Transaction |
Date of Transaction |
Nature of
Transaction(1) |
Number of SDRs |
Average price
per SDR(2) |
Millicom International Cellular S.A. |
5/22/2024 |
Repurchase of SDRs |
2,275 |
SEK 253.6489 |
Millicom International Cellular S.A. |
5/21/2024 |
Repurchase of SDRs |
7,426 |
SEK 256.3550 |
Millicom International Cellular S.A. |
5/20/2024 |
Repurchase of SDRs |
7,463 |
SEK 256.7634 |
Millicom International Cellular S.A. |
5/17/2024 |
Repurchase of SDRs |
7,300 |
SEK 254.1299 |
Millicom International Cellular S.A. |
5/16/2024 |
Repurchase of SDRs |
7,277 |
SEK 254.1169 |
| (1) | All
purchases were made pursuant to the Company’s share repurchase program announced on
December 15, 2023 and were carried out on Nasdaq Stockholm by Citigroup Global Markets Limited
on behalf of the Company. |
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS
Pursuant to resolutions of the Board, the Independent
Committee has been delegated exclusive power and authority to, among others things, manage all matters on behalf of the Company related
to the Offers.
For the reasons discussed in “Item 4.
The Solicitation or Recommendation — Reasons for the Recommendation” above, the Independent Committee unanimously
determined that the Offers significantly undervalue the Company and are not in the best interests of the Company and its shareholders.
Accordingly, this Schedule 14D-9 sets forth the Independent Committee’s recommendation that the Company’s shareholders reject
the Offers and not tender their Shares pursuant to the Offers.
The Company regularly maintains discussions with
third parties in the industries in which it participates regarding possible business transactions and otherwise, in the ordinary course
of its business, considers various strategic transactions. The Company has not ceased such activity as a result of the Offers and expects
to continue such activity. The Company’s policy has been, and continues to be, not to disclose or comment on the existence or content
of any such discussions with third parties or potential strategic transactions (except as may be required by applicable law or regulations).
Except as set forth in this Schedule 14D-9 or
as incorporated in this Schedule 14D-9 by reference, the Company (as the subject company) is not undertaking or engaged in any negotiations
in response to the Offers that relate to: (i) a tender offer for, or other acquisition of, the Company’s securities by the
Company, any of its subsidiaries or any other person; (ii) any extraordinary transaction, such as a merger, reorganization or liquidation,
involving the Company or any of its subsidiaries; (iii) any purchase, sale or transfer of a material amount of assets of the Company
or any of its subsidiaries; or (iv) any material change in the present dividend rate or policy, or indebtedness or capitalization
of the Company.
Except as set forth in this Schedule 14D-9 or
as incorporated in this Schedule 14D-9 by reference, there has been no transaction, Board or Independent Committee resolution, agreement
in principle or signed contract entered into in response to the Offers that relates to, or would result in, one or more of the matters
referred to in this Item 7.
ITEM 8. ADDITIONAL INFORMATION
Under Luxembourg Law, Shareholder Approval of a Takeover Squeeze-Out
Is Not Required
The Purchaser Group has stated that if the Offers
are consummated, subject to applicable law, the Purchaser Group would have the right to exercise a Takeover Squeeze-Out, as a result of
which the other remaining Company shareholders would transfer their Shares to Purchaser in exchange for a fair price (as determined in
accordance with applicable Luxembourg law). Pursuant to Article 15 paragraph 5 of the Luxembourg Takeover Law, the Offer Price is presumed
to be fair for a Takeover Squeeze-Out if Purchaser, through acceptance of the Offers, succeeded in acquiring securities representing not
less than 90% of the share capital of the Company carrying voting rights comprised in the Offers. A Takeover Squeeze-Out would not require
the approval of any other Company shareholders.
Appraisal Rights
No appraisal rights are available to holders of Shares in connection
with the Offers.
Regulatory Approvals
Except as set forth in this Schedule 14D-9 and
in the Offer to Purchase, the Company is not aware of any material filing, approval or other action by or with any governmental authority
or administrative or regulatory agency that would be required for Purchaser to acquire or own Shares pursuant to the Offers. There can
be no assurance that a challenge to the Offers relating to regulatory approvals will not be made, or if such a challenge is made, what
the result will be.
Cautionary Statement
In connection with its review and evaluation of
the Offers, the Independent Committee considered (i) the 2024Q2 Preliminary Financial Review, which was the basis of the Preliminary 2024
Expectations and (ii) the Long-Range Plan, which was the basis of the Long-Range Plan Expectations. The 2024Q2 Preliminary Financial Review
and the Long-Range Plan are referred to collectively as the “Expectation Details” and the Preliminary 2024 Expectations
and the Long-Range Plan Expectations are referred to collectively as the “Expectations”.
The Expectations included in this Schedule 14D-9
are intended solely to provide the Company’s shareholders access to certain of the Independent Committee’s interpretations
of the Expectation Details that were made available to the Independent Committee, the Company Financial Advisors and Nordea. The Expectation
Details and the Expectations are not being included in this Schedule 14D-9 to influence the decision of any Company shareholders regarding
whether to tender Shares in the Offers or for any other purpose. The Expectation Details on which the Expectations were based may include
projections that differ from publicly available analyst estimates and projections and do not take into account any events or circumstances
after the date they were prepared, including the announcement of the Offers.
The Expectation Details on which the Expectations
were based are necessarily based on numerous variables, estimates, assumptions and judgments made by the Company’s management, based
on information available at the time the Expectation Details were developed, with respect to industry performance and competition, general
business, economic, regulatory, market and financial conditions, other future events and matters specific to the Company’s business,
all of which are inherently uncertain, difficult to predict and many of which are beyond the Company’s control. There can be no
assurances that the Expectations will accurately reflect future trends or accurately estimate the Company’s future financial and
operating performance.
Additionally, calculations of the Expectations
(and the underlying Expectation Details) assume that no capital allocation activities or transactions, including distributions of dividends,
share repurchases, strategic transactions or similar activities or transactions, have been undertaken by the Company in the relevant period(s).
The Expectation Details on which the Expectations
were based are also inherently based on assumptions as to certain business decisions that are subject to change. Important factors that
may affect actual results and cause the Expectations not to be achieved include, but are not limited to, risks and uncertainties relating
to the Company’s business (including the ability to achieve strategic goals, objectives and targets over the applicable periods),
industry performance and competition, general business, economic, regulatory, market and financial conditions and other factors described
in or referenced below in the section “Item 8. Additional Information — Forward-Looking Statements”
and those risks and uncertainties detailed in the Company’s public filings with the SEC, including those set forth in the Annual
Report under the section entitled “Part I — Item 3. Key Information — D. Risk Factors”.
Accordingly, there can be no assurance that the Expectations will be realized, and actual results may vary materially from the Expectations.
Modeling and forecasting the future performance of a provider of fixed and mobile telecommunications services is a highly speculative
endeavor.
The Expectations include certain financial measures
which are not IFRS measures. Such financial measures should not be considered in isolation from, or as a substitute for, financial information
presented in accordance with IFRS. The Company’s calculations of these financial measures may differ from others in its industry
and are not necessarily comparable with information presented under similar captions used by other companies. Please see “—Use
of Non-IFRS Terms” below for more information about these measures.
The Expectation Details on which the Expectations
were based were the responsibility of the Company’s management. Neither Ernst & Young Société anonyme (“EY”),
the Company’s independent registered public accounting firm, nor any other auditing firm, has audited, reviewed, examined, compiled
or applied agreed-upon procedures with respect to the Expectation Details and, accordingly, neither EY nor any other auditing firm has
expressed any opinion or any other form of assurance with respect thereto.
The inclusion of the Expectations in this Schedule
14D-9 should not be regarded as an indication that the Company, the Company Financial Advisors, Nordea or any of their respective affiliates,
officers, directors, advisors or representatives considered or consider the Expectations to be predictive of actual future events, and
the Expectations should not be relied on as such. None of the Company, the Company Financial Advisors, Nordea nor any of their respective
affiliates, officers, directors, advisors or representatives can give any assurance that actual results will not differ materially from
the Expectations.
None of the Company, the Company Financial Advisors,
Nordea or any of their respective affiliates, officers, directors, advisors or representatives has made or makes any representation to
any Company shareholder or other investor regarding the ultimate performance of the Company compared to the Expectations or that the Expectations
will be achieved.
In light of the foregoing factors and the uncertainties
inherent in the Expectations, Company shareholders and other investors are cautioned not to place undue, if any, reliance on the Expectations.
None of the Company nor any of its affiliates,
officers, directors, advisors or other representatives undertakes any obligation to update or otherwise revise or reconcile any Expectations
to reflect circumstances existing after the date the Expectation Details were generated or the Expectations were formed or to reflect
the occurrence of subsequent or future events even in the event that any or all of the assumptions underlying the Expectations are shown
to be in error. The Company undertakes no responsibility to make publicly available any update or other revision to the Expectations except
as required by law.
Forward-Looking Statements
This Schedule 14D-9 contains statements that constitute
“forward-looking” statements under U.S. federal securities laws, including certain forward-looking statements concerning the
Company’s intentions, beliefs or current expectations regarding the Company’s future financial results, plans, liquidity,
prospects, growth, strategy and profitability, as well as the general economic conditions of the industries and countries in which the
Company operates. Forward-looking statements include the Expectations, the Expectation Details, statements concerning the Company’s
plans, objectives, goals, strategies, future events, future sales or performance, capital expenditures, financing needs, plans or intentions
relating to acquisitions, the Company’s competitive strengths and weaknesses, the Company’s business strategy and the trends
the Company anticipates in the industries and the economic, political and legal environments in which the Company operates and other information
that is not historical information.
Many of the forward-looking statements contained
in this Schedule 14D-9 can be identified by the use of forward-looking words such as “anticipate”, “believe”,
“could”, “expect”, “should”, “plan”, “intend”, “estimate” and
“potential”, among others. These statements appear in a number of places in this Schedule 14D-9 and include, but are not limited
to, statements regarding the Company’s intent, belief or current expectations with respect to:
| · | global economic conditions, foreign exchange rate fluctuations and high inflation, as well as local economic
conditions in the markets the Company serves, which can be impacted by geopolitical developments outside of the Company’s principal
geographic markets; |
| · | potential disruption due to diseases, pandemics (including the COVID-19 virus), political events, armed
conflict and acts by terrorists; |
| · | telecommunications usage levels, including traffic, customer growth and the accelerated transition from
traditional to digital services; |
| · | competitive forces, including pricing pressures, piracy, the ability to connect to other operators’
networks and the Company’s ability to retain market share in the face of competition from existing and new market entrants as well
as industry consolidation; |
| · | the achievement of the Company’s operational goals, financial targets and strategic plans, including
the anticipated efficiencies and savings of the Company’s cost-reduction project, the acceleration of cash flow growth and the expansion
of the Company’s fixed broadband network; |
| · | legal or regulatory developments and changes, or changes in governmental policy, including with respect
to the availability and terms and conditions of spectrum and licenses, the level of tariffs, laws and regulations which require the provision
of services to customers without charging, tax matters, controls or limits on the purchase of U.S. dollars, the terms of interconnection,
customer access and international settlement arrangements; |
| · | the achievement of environmental, social and governance targets, including through the use of solar panels
and other methods that aim to lower the energy consumption of the Company’s networks, such as the increased implementation of Fiber-to-the-Home,
and various diversity, equity and inclusion targets; |
| · | the Company’s ability to grow the Company’s mobile financial services business in the Company’s
Latin American markets; |
| · | adverse legal or regulatory disputes or proceedings; |
| · | the success of the Company’s business, operating and financing initiatives and strategies, including
partnerships and capital expenditure plans; |
| · | the Company’s expectations regarding the growth in fixed broadband penetration rates and the return
that the Company’s investment in broadband networks will yield; |
| · | the level and timing of the growth and profitability of new initiatives, start-up costs associated with
entering new markets, the successful deployment of new systems and applications to support new initiatives; |
| · | the Company’s ability to create a new organizational structure for the Tigo Money business and manage
it independently to enhance its value; |
| · | the Company’s ability to optimize the utilization and capital structure of the Company’s tower
assets, and increase the Company’s network coverage, capacity and quality of service by focusing capital on other fixed assets; |
| · | relationships with key suppliers and costs of handsets and other equipment; |
| · | disruptions in the Company’s supply chain due to economic and political instability, the outbreak
of war or other hostilities, public health emergencies, natural disasters and general business conditions; |
| · | the Company’s ability to successfully pursue acquisitions, investments or merger opportunities,
integrate any acquired businesses in a timely and cost-effective manner, divest or restructure assets and businesses, and achieve the
expected benefits of such transactions; |
| · | the availability, terms and use of capital, the impact of regulatory and competitive developments on capital
outlays, the ability to achieve cost savings and realize productivity improvements; |
| · | technological development and evolving industry standards, including challenges in meeting customer demand
for new technology and the cost of upgrading existing infrastructure; |
| · | the capacity to upstream cash generated in operations through dividends, royalties, management fees and
repayment of shareholder loans; |
| · | other factors or trends affecting the Company’s financial condition or results of operations; and |
| · | various other factors, including without limitation those described under “Part I — Item
3. Key Information — D. Risk Factors” in the Annual Report. |
This list of important factors is not exhaustive.
You should carefully consider the foregoing factors and other uncertainties and events, especially in light of the political, economic,
social and legal environments in which the Company operates. Forward-looking statements are only the Company’s current expectations
and are based on the Company’s management’s beliefs and assumptions and on information currently available to the Company’s
management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied
in the forward-looking statements as a result of various factors, including, but not limited to, those identified under “Part
I — Item 3. Key Information — D. Risk Factors” in the Annual Report.
The Company does not intend to update any of these forward-looking statements to
reflect events or circumstances that occur after the date hereof except as required by law.
Use of Non-IFRS Terms
Non-IFRS Measures
This Schedule 14D-9 contains financial measures
that are not prepared in accordance with IFRS. These measures are referred to as “non-IFRS” measures, and they are not uniformly
or legally defined financial measures. Non-IFRS measures are not substitutes for IFRS measures in assessing the Company’s overall
operating performance. Because non-IFRS measures are not determined in accordance with IFRS, and are susceptible to varying calculations,
non-IFRS measures may not be comparable to other similarly titled measures presented by other companies.
The Company does not reconcile its forward-looking
non-IFRS financial measures to the nearest equivalent IFRS measures because such reconciliations are not available without unreasonable
efforts, including due to the difficulty in making accurate forecasts and projections and/or certain information not being ascertainable
or accessible.
Non-IFRS measures are included in this Schedule
14D-9 because they are used by the Company’s management, and the Company believes they provide investors with additional background
for the analysis of certain information set forth in this Schedule 14D-9. The Company’s management uses non-IFRS measures to make
operating decisions, as they facilitate additional internal comparisons of the Company’s performance to historical results, and
provides them to investors for additional insight into the Company’s operating performance.
Non-IFRS measures have limitations as analytical
tools. The non-IFRS measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly
titled measures used by other companies. In addition, non-IFRS measures should not be considered in isolation as a substitute for, or
as superior to, financial measures calculated in accordance with IFRS. The Company’s financial results calculated in accordance
with IFRS and reconciliations to those financial statements should be carefully evaluated.
Description of Non-IFRS Measures
EBITDA is operating profit excluding impairment losses, depreciation
and amortization, and gains/losses on fixed asset disposals.
EBITDA after Leases (EBITDAaL) represents EBITDA after lease
interest expense and depreciation charge.
Net debt is Debt and financial liabilities, including derivative
instruments (assets and liabilities), less cash and pledged and time deposits.
Leverage is the ratio of Net debt over LTM (Last twelve month)
EBITDAaL, proforma for acquisitions made during the last twelve months.
Capex is balance sheet capital expenditure excluding spectrum
and license costs and lease capitalizations.
Cash Capex represents the cash spent in relation to capital
expenditure, excluding spectrum and licenses costs.
Operating Cash Flow (OCF) is EBITDA less Capex.
Operating Free Cash Flow (OFCF) is EBITDA, less cash capex,
less spectrum paid, working capital and other non-cash items, and taxes paid.
Equity Free Cash Flow (EFCF) is OFCF less finance charges paid
(net), lease interest payments, lease principal repayments, and advances for dividends to non-controlling interests, plus cash repatriation
from joint ventures and associates.
Where You Can Find Additional Information
For additional information regarding the business
and the financial results of the Company, please see the Annual Report, the Company’s Current Reports on Form 6-K filed from time
to time with the SEC and other public filings of the Company made from time to time with the SEC, which can be obtained free of charge
at the SEC’s website at www.sec.gov.
Concurrently with the filing of this Schedule
14D-9, the Independent Committee is issuing a press release announcing its recommendation and certain of the Expectations disclosed in
this Schedule 14D-9.
ITEM 9. EXHIBITS
The following Exhibits are filed herewith or incorporated herein by
reference:
Exhibit No. |
|
Description |
(a)(1)(A) |
|
Offer to Purchase, dated July 1, 2024 (incorporated by reference to Exhibit (a)(1)(A) to the Schedule TO of Atlas Luxco S.à r.l., Atlas Investissement, NJJ Holding, Xavier Niel and Maxime Lombardini, filed July 1, 2024 (the “Schedule TO”)). |
(a)(1)(B) |
|
Form of Letter of Transmittal (incorporated by reference to Exhibit (a)(1)(B) to the Schedule TO). |
(a)(1)(C) |
|
Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (incorporated by reference to Exhibit (a)(1)(C) to the Schedule TO). |
(a)(1)(D) |
|
Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (incorporated by reference to Exhibit (a)(1)(D) to the Schedule TO). |
(a)(2)(A)* |
|
Swedish Recommendation Statement, dated July 15, 2024, including opinion of Nordea, dated July 12, 2024. |
(a)(5)(A)* |
|
Press Release of the Independent Committee, dated July 15, 2024. |
(a)(5)(B) |
|
Press Release of the Independent Committee, dated June 27, 2024 (incorporated by reference to the Company’s Current Report on Form 6-K, filed June 28, 2024). |
(a)(5)(C)* |
|
Opinion of Nordea, dated July 12, 2024. |
(e)(1)* |
|
Excerpts (Items 6.A., 6.B., 6.C., 7.A. and 7.B.) of the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2023, filed with the SEC on March 12, 2024. |
* Filed herewith.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Schedule 14D-9 is true, complete and correct.
|
MILLICOM INTERNATIONAL CELLULAR S.A. |
|
|
|
|
|
|
By: |
/s/ Salvador Escalón |
|
|
Name: Salvador Escalón
Title: Executive Vice President, Chief Legal and Compliance Officer |
Date: July 15, 2024
Exhibit (a)(2)(A)
The
independent committee of the Board of Directors of Millicom (Tigo) unanimously recommends that shareholders and SDR holders not
accept the public cash offers made by Atlas Luxco S.à r.l. and gives an update on Millicom’s long-range
plan
(issued pursuant to the Swedish Takeover Rules)
For the reasons
further discussed in Section 3 below, the independent committee is of the opinion that the public cash takeover offers made by Atlas
Luxco S.à r.l. significantly undervalue Millicom and recommends that shareholders and SDR-holders not accept the offers.
In support
of its recommendation and to provide shareholders and SDR holders with further information in view of their decision on whether to accept
the offers, the independent committee gives an update on Millicom’s long-range plan as further discussed in Section 3.2 below.
The update includes the independent committee’s expectations of Equity free cash1 flow and Leverage1 for
2024 through 2026.
Luxembourg,
15 July, 2024 – This statement is made by the independent committee2 (the “Independent
Committee”) of the board of directors of Millicom International Cellular S.A. (“Millicom”) pursuant to
section II.19 of the Takeover Rules for Nasdaq Stockholm and Nordic Growth Market NGM (the “Takeover
Rules”).
On July 1, 2024,
Atlas Luxco S.à r.l. (“Atlas”), a subsidiary of Atlas Investissement S.A.S., announced separate but concurrent
public offers in Sweden (the “Swedish Offer”) and the United States (the “US Offer”, and together
with the Swedish Offer, the “Offers”) to the shareholders in Millicom to tender all of their outstanding common shares
in Millicom (the “Common Shares”), including Swedish Depositary Receipts representing Common Shares (with each Swedish
Depositary Receipt representing one Common Share) (the “SDRs,” and together with the Common Shares, the “Shares”)
to Atlas, for USD 24.00 per Common Share and USD 24.00 per SDR (the “Offer Price”). The offer price of USD 24.00 per
SDR currently corresponds to SEK 252.8.3 The Offers value the total number of outstanding Shares in
1
Equity free cash flow and Leverage are non-IFRS measures. Please see Section 3.2 below for more information on these measures.
2
Due to a conflict of interest based on their relationship with Atlas (as defined below), Aude Durand, Maxime Lombardini and Thomas
Reynaud have not participated in the Millicom Board’s handling of matters related to the Offers. All such matters have been delegated
to and handled by the Independent Committee, which is comprised of the unconflicted members of the Millicom Board, namely Mauricio Ramos
(the Chair of the Board), Maria Teresa Arnal, Bruce Churchill, Justine Dimovic, Tomas Eliasson and Blanca Treviño de Vega. Given
these circumstances, Section III of the Takeover Rules is applicable to the Swedish Offer.
3
The Offer Price per SDR in SEK to be paid to the holders of SDRs will be set by Atlas based on a USD/SEK exchange rate close to
the settlement date of the Swedish Offer. The calculation of SEK 252.8 above is based on a USD/SEK exchange rate of 10.53 (the official
currency exchange rate as of 12 July, 2024).
Millicom at approximately
USD 4.1 billion (currently corresponding to SEK 43.2 billion). Holders of Common Shares and SDRs are collectively referred to below as
“Shareholders”.
The Offer Price
represents:
| · | A
negative premium of -1.4 per cent compared to the closing SDR price on Nasdaq Stockholm
of SEK 258.0 on June 28, 2024, the last full trading day prior to the announcement of the
Offers (converted at a USD/SEK exchange rate of 10.60); |
| · | A
limited premium of 2.4 per cent compared to the closing SDR price on Nasdaq Stockholm
of SEK 251.6 on May 22, 2024, the last full trading day prior to Atlas issuing a press release
announcing that it was exploring a potential all cash tender offer for the Shares (converted
at an assumed USD/SEK exchange rate of 10.73); |
| · | A
negative premium of -0.2 per cent compared to the volume-weighted average SDR price
on Nasdaq Stockholm of SEK 252.7, for the 30-day trading period ending on June 28, 2024,
the last full trading day prior to the announcement of the Offers (converted at an observed
USD/SEK exchange rate of 10.51); |
| · | A
negative premium of -2.2 per cent compared to the closing share price on Nasdaq US
of USD 24.55 on June 28, 2024, the last full trading day prior to the announcement of the
Offers; |
| · | A
limited premium of 1.8 per cent compared to the closing share price on Nasdaq US of
USD 23.58 on May 22, 2024, the last full trading day prior to Atlas issuing a press release
announcing that it was exploring a potential all cash tender offer for the Shares; and |
| · | A
negative premium of -0.3 per cent compared to the volume-weighted average share price
on Nasdaq US of USD 24.07, for the 30-day trading period ending on June 28, 2024, the last
full trading day prior to the announcement of the Offers. |
According to the
offer document for the Offers (the “Offer to Purchase”), which was made public by Atlas on July 1, 2024, the initial
acceptance period for the Offers commenced on July 1, 2024, and ends on August 16, 2024 (such period, including any extension, the “Offer
Period”). The estimated date of settlement is on or around August 29, 2024. Atlas has reserved the right to extend the Offer
Period and to postpone the settlement date.
The completion of
the Offers is subject to the following conditions:
1. the
Offers being accepted to such extent that Atlas becomes the owner of Shares representing ninety-five (95) per cent or more of the Shares,
excluding Shares held in treasury by Millicom;
2. no
other party announcing an offer to acquire Shares on terms that are more favorable to the Shareholders than the Offers;
3. with
respect to the Offers and completion of the acquisition of Millicom, receipt of all necessary regulatory, governmental or similar clearances,
approvals, decisions and other actions from authorities or similar, including from competition authorities, being obtained, in each case
on terms which, in Atlas’s opinion, are acceptable;
4. neither
the Offers nor the acquisition of Millicom being rendered wholly or partially impossible or significantly impeded as a result of legislation
or other regulation, any decision of a court or public authority, or any similar circumstance;
5. no
circumstances having occurred which could have a material adverse effect or could reasonably be expected to have a material adverse effect
on Millicom’s financial position or operations, including Millicom’s sales, results, liquidity, equity ratio, equity or assets;
6. no
information made public by Millicom, or otherwise made available to Atlas by Millicom, being inaccurate, incomplete or misleading, and
Millicom having made public all information which should have been made public; and
7. Millicom
not taking any action that is likely to impair the prerequisites for making or completing the Offers.
Atlas has reserved
the right to withdraw the Offers in the event that it is clear that any of the above conditions are not satisfied or cannot be satisfied.
However, with regard to conditions 2 – 7 above, the Offers may only be withdrawn where the non-satisfaction of such condition
is of material importance to Atlas’s acquisition of Millicom or if otherwise approved by the Swedish Securities Council (Sw. Aktiemarknadsnämnden).
Atlas has reserved
the right to waive, in whole or in part, one, several or all of the conditions to the completion of the Offers set forth above, including,
with respect to condition 1 above, to complete the Offers at a lower level of acceptance.
Atlas, through affiliates,
is today the largest shareholder of Millicom, and controls approx. 29.03 per cent of the share capital and the total number of votes
in Millicom.
For further information
about the Offers, please refer to www.atlas-investissement.com/en/offers.
Following the Offers
being made, Nordea Bank Abp, filial i Sverige, Corporate Finance (“Nordea”) was engaged to provide a fairness opinion
to the Independent Committee in accordance with the Takeover Rules. Nordea provided an opinion to the Independent Committee dated July
12, 2024 stating that, as of July 12, 2024, and based upon and subject to the matters considered, the procedures followed, the assumptions
made and various limitations of and qualifications to the review undertaken set forth in such opinion, the Offer Price was not fair,
from a financial point of view, to the Shareholders (other than Atlas and its affiliates) (the “Opinion”). The Opinion
is attached to this statement. Nordea provided the Opinion solely for the information and assistance of the Independent Committee in
connection with its consideration of the Offers. Nordea’s Opinion does not constitute a recommendation to any Shareholder as to
whether or not the Shareholders should accept the Offers or any other matter. In exchange for providing the Opinion, Nordea will receive
a fixed fee which became payable upon delivery of the Opinion and is payable whether or not the Offers are completed and is not contingent
upon the Offer Price or the level of acceptance of the Offers by the Shareholders. Nordea is considered to be independent as defined
in the Takeover Rules.
Goldman Sachs International
and Morgan Stanley & Co. International plc are acting as financial advisors to Millicom.
Davis Polk
& Wardwell LLP, Nord Advokater and Advokatfirman Lindahl and Hogan Lovells (Luxembourg) LLP are acting as legal advisors to the
Independent Committee and Millicom in relation to the Offers.
| 2. | The
process leading to the Offers |
On May 23, 2024,
Atlas sent the Board a non-binding indication of interest related to a potential all-cash offer for all of the Shares (including Shares
represented by SDRs) that Atlas and its
affiliates did not
then currently own, for a purchase price of USD 24.00 per Common Share (and the SEK equivalent per SDR).
On June 12, 2024,
Atlas sent the Board a second letter confirming, among other things, its intent to move forward with a “recommended” voluntary
all-cash offer at the same price indicated in the first letter.
On June 18, 2024,
the Independent Committee sent a letter to Atlas stating that Atlas’s proposed offer price significantly undervalued Millicom and
further informed Atlas that, given that Atlas had neither raised its intended offer price nor indicated that it might do so despite certain
limited due diligence materials being made available and calls held with Millicom’s management (which were limited did not contain
inside information), the Independent Committee did not see a basis to provide any further diligence access to Atlas and its affiliates
at that time. The letter also described additional information the Independent Committee would require should Atlas wish to submit a
revised proposal for the Independent Committee’s consideration.
On June 27, 2024,
the Independent Committee issued a press release (the “June 27 Press Release”) announcing (i) that it anticipated
Atlas would launch an all-cash tender offer in the near term at a price of USD 24.00 per Common Share (and the SEK equivalent per SDR),
notwithstanding the fact that the Independent Committee had previously informed Atlas that the Independent Committee unanimously believed
that such an offer price would significantly undervalue Millicom, and (ii) in light of the anticipated tender offer, and to support Shareholders
in evaluating such tender offer, based on Millicom’s preliminary review of financial performance for the second quarter of 2024
(which then continued, and still continues, to be subject to review by Millicom’s management and auditor), the Independent Committee’s
expectations as to certain financial performance of Millicom.
On July 1, 2024,
Atlas launched the Offers by issuing a press release and subsequently on the same day obtained approval of the Offer to Purchase from
the Swedish Financial Supervisory Authority (Sw. Finansinspektionen). The Offer Period commenced on the same day.
On July 15, 2024,
the Independent Committee unanimously determined that the Offers significantly undervalue Millicom and are not in the best interests
of the Shareholders and issued this recommendation statement.
| 3. | The
Independent Committee’s statement on the Offers |
IN SUMMARY, FOR
THE REASONS SET FORTH BELOW, THE INDEPENDENT COMMITTEE UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS NOT ACCEPT THE OFFERS AND
NOT TENDER THEIR SHARES PURSUANT TO THE OFFERS.
3.1 Reasons for
recommending that Shareholders not accept the Offers
The recommendation
of the Independent Committee to not accept the Offers is, inter alia, based on the following reasons:
| · | the
Offer Price significantly undervalues Millicom, including based on the following considerations: |
| o | the
Offer Price does not adequately take into account expectations based on Millicom’s
long-range plan that Millicom will generate Equity free cash flow (as defined below) of USD
659 million, USD 701 million and USD 833 million in 2024, 2025 and 2026, respectively (see
Section 3.2 below); |
| o | the
Offer Price does not adequately take into account that, as previously announced and based
on results through mid-June 2024, Millicom’s Equity free cash flow4
for full year 2024 is expected to be above $600 million (with this expectation not
including Millicom’s prior receipt of $46 million of net proceeds from its previously
announced Colombia tower sale) and Millicom’s Leverage4 is expected to end
2024 near the intermediate term target of 2.5x; |
| · | the
Offer Price is well below trading multiples for comparable listed companies: |
| o | while
the average 2024 enterprise value to operating cash flow multiple of Millicom’s Trading
Peers5 is 7.4x, the Offer Price represents a 37.3% discount to the price per Share
implied by applying the same multiple to Millicom;6 and |
| o | while
the average Equity free cash flow yield of Millicom’s Trading Peers is 10.5%, the Offer
Price represents a 30.1% discount to the price per Share implied by applying the same yield
to Millicom;6 |
| · | the
Offer Price represents a negative premium to the most recent closing price of the
Shares and the closing prices of the Shares on certain other key dates: |
| o | a
negative premium of -1.4 per cent compared to the closing SDR price on Nasdaq Stockholm
of SEK 258.0 on June 28, 2024, the last full trading day prior to the announcement of the
Offers (converted at a USD/SEK exchange rate of 10.60); |
| o | a
negative premium of -0.2 per cent compared to the volume weighted average SDR price
on Nasdaq Stockholm of SEK 252.7, for the 30-day trading period ending on June 28, 2024,
the last full trading day prior to the announcement of the Offers (converted at an observed
USD/SEK exchange rate of 10.51); |
| o | a
negative premium of -2.3% to the closing price of SEK 258.8 per SDR on July 12, 2024,
the last full trading day prior to this release (converted at a USD/SEK exchange rate of
10.53); |
| · | the
average control premia to undisturbed prices observed in all-cash technology, media, and
telecommunications transactions involving targets that are considered to be large publicly
listed companies in the United States and Europe over the past 15 years range between 17.4%
and 46.4%, while the Offer Price represents a limited premium of 2.4 per cent compared
to the closing price of SEK 251.6 per SDR (converted at a USD/SEK exchange rate of 10.73)
on May 22, 2024, the last full trading |
4
Equity free cash flow and Leverage are non-IFRS measures. Please see Section 3.2 below for more information on these measures.
5
“Trading Peers” include: Liberty Latin America Ltd. (LILA), America Movil S.A.B. de C.V. (AMX), Telefonica Brasil S.A.
(VIVT3), and TIM Brasil Serviços e Participações S.A. (TIMS3). Entel S.A. (ENTEL) is not considered a relevant trading
peer because of its lower profitability margins as a result of a different business model and product mix, as well as lower trading liquidity.
6
Comparable multiples and yields are calculated on a proportionate basis, i.e., accounting for Operating cash flow and Equity free
cash flow as per Millicom’s definitions at each subsidiary level and adding it pro rata to Millicom’s ownership in each subsidiary.
Operating cash flow is defined as EBITDA (as defined below) less Capex. Capex is defined as balance sheet capital expenditure excluding
spectrum and license costs and lease capitalizations.
day prior
to Atlas issuing a press release announcing that it was exploring a potential all cash tender offer for the Shares;
| · | the
Offers do not adequately consider the potential value of ongoing and potential strategic
transactions and alternatives, including that Millicom may evaluate whether to distribute
dividends and/or implement a share repurchase program or otherwise return capital to its
Shareholders (i.e., given the Long-Range Plan Expectations discussed in Section 3.2 below,
and in particular Millicom’s expected anticipated cash flow generation, Millicom may,
between 2024 and 2026, have excess cash sufficient to distribute dividends and/or implement
a share repurchase program); and |
| · | Atlas
states in the Offer to Purchase that it reasonably believes that the Offer Price “is
fair to [u]naffiliated [s]hareholders seeking immediate liquidity”, while the
Independent Committee evaluated and bases its recommendation on whether the Offer Price was
fair to all of Millicom’s unaffiliated shareholders. |
The Independent
Committee believes that, taken as a whole, including the overall assessment conducted by the Independent Committee as summarized below,
the foregoing reasons support the Independent Committee’s determination that the Offers are not in the best interests of the Shareholders.
3.2 Update on
Millicom’s long-range plan
In evaluating the
Offers and in the course of its deliberations leading to the determination to recommend that Shareholders not accept the
Offers and not tender their Shares pursuant to the Offers, the Independent Committee discussed with Millicom’s management
its most updated long-range plan for Millicom (the “Long-Range Plan”), including Millicom’s anticipated cash
flow generation contemplated thereby, and which was based, in part, on the preliminary review and report by Millicom’s management
of Millicom’s financial performance for the second quarter of 2024 (the “2024Q2 Preliminary Financial Review”),
each of which continues to be subject to review by Millicom’s management and auditor.
Accordingly, in
connection with the Offers, and to support the Shareholders in evaluating the Offers and the Independent Committee’s recommendation,
the Independent Committee observes that the Long-Range Plan presently indicates the following expectations for Millicom’s 2024
through 2026 fiscal years (the “Long-Range Plan Expectations”):
($
in millions) |
2024E |
2025E |
2026E |
Equity
free cash flow7 |
659 |
701 |
833 |
Leverage8 |
2.4x |
1.9x |
1.5x |
7
Equity free cash flow is defined as Operating free cash flow (as defined below), less finance charges paid (net), lease interest
payments, lease principal repayments, and advances for dividends to non-controlling interests, plus cash repatriation from joint ventures
and associates. Operating free cash flow is defined as EBITDA, less cash capex, less spectrum paid, working capital and other non-cash
items, and taxes paid. EBITDA is defined as operating profit excluding impairment losses, depreciation and amortization, and gains/losses
on fixed asset disposals. Cash Capex is defined as the cash spent in relation to capital expenditure, excluding spectrum and licenses
costs.
8
Leverage is defined as the ratio of Net debt over LTM (last twelve month) EBITDAaL, pro forma for acquisitions made during the
last twelve months. Calculations of Leverage in this statement assume that no capital allocation activities or transactions, including
distributions of dividends, share repurchases, strategic transactions or similar activities or transactions, have been undertaken by
Millicom in the relevant period(s). Net debt is defined as Debt and financial liabilities, including derivative instruments (assets and
liabilities), less cash and pledged and time deposits. EBITDA after Leases (EBITDAaL) is defined as EBITDA after lease interest expense
and depreciation charge.
The Long-Range Plan
Expectations are underpinned by, among other things, recent cash flow outperformance (as announced in the June 27 Press Release) and
expected near-term cash flow improvement. While Millicom has gone through a period of constrained cash flows over the last several years,
given meaningful investments made by Millicom in its business activities, including with respect to spectrum, capital expenditures and
recent internal restructurings, Millicom’s management believes this investment period is nearing conclusion and expects Millicom’s
cash flow generation to significantly increase over the coming years as reflected in the Long-Range Plan. However, the Long-Range Plan
Expectations assume that no capital allocation activities or transactions, including distributions of dividends, share repurchases, strategic
transactions or similar activities or transactions, have been undertaken by Millicom in the relevant period(s).
Accordingly, taking
into account risk-adjusted value, potential benefits, risks and uncertainties that may ultimately impact the accuracy of the Long-Range
Plan, and subject to further changes in Millicom’s business, assets, liabilities, financial condition, results of operations, management,
competitive position, prospects and operating plans, as well as industry, economic and stock and credit market conditions, the Independent
Committee believes that the intrinsic valuation of Millicom implied by the Long-Range Plan is more favorable to the Shareholders than
the valuation implied by the Offer Price.
Note that Millicom’s
actual future financial results may differ materially from those expressed in the Long-Range Plan due to numerous factors, including
many that are beyond Millicom’s ability to control or predict. The above information about the Long-Range Plan should be read in
light of the important disclosures set forth below under “Cautionary Statement”.
3.3 Overall assessment;
method
In evaluating the
Offers, the Independent Committee conducted an overall assessment and reviewed, considered and evaluated a significant amount of information
and factors, including potential benefits, detriments and implications of the Offers to Millicom and the Shareholders that the Independent
Committee considered relevant for its evaluation of the Offers. These factors included, but were not limited to, the current and historic
market prices of the Shares, prevailing market conditions and opportunities and challenges in each market in which Millicom operates,
Millicom’s strategic options and Millicom’s expected future development and financial performance, as well as opportunities
and risks related to the foregoing.
Further, and without
limitation, the Independent Committee, in consultation with Millicom’s management, Millicom’s financial advisors and Nordea,
analyzed the Offers using certain methods typically used for evaluating tender offers for publicly listed companies, including the implied
valuation of Millicom in the Offers relative to comparable publicly listed companies, the Offer Price relative to the price per share
paid in comparable transactions, premia that were applicable in previous tender offers for comparable publicly listed companies, the
Independent Committee’s belief of the stock market’s expectations in respect of Millicom and the Independent Committee’s
view of Millicom’s long-term value, including based on Millicom’s long-range plan and expected future cash flows.
The Independent
Committee has also considered the Opinion from Nordea stating that, as of July 12, 2024, and based upon and subject to the matters considered,
the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken set forth in the
Opinion, the Offer Price was not fair, from a financial point of view, for the Shareholders (other than Atlas and its affiliates). The
full text of the Opinion of Nordea, dated July 12, 2024, which sets forth the matters considered, the procedures followed, the assumptions
made and various limitations of and qualifications to the review undertaken in connection with such Opinion, is attached to this statement.
For further details on Nordea’s Opinion, please see section 1 of this statement.
The foregoing discussion
of the Independent Committee’s reasons for its recommendation that Shareholders not accept the Offers and not
tender their Shares pursuant to the Offers is not intended to be exhaustive, but the Independent Committee believes it includes
all the material information and factors considered by the Independent Committee. In view of the wide variety of factors considered in
connection with its evaluation of the Offers and the complexity of these matters, the Independent Committee did not consider it practicable
to, and did not attempt to, quantify or otherwise assign relative or specific weight or values to any of these factors. Rather, the Independent
Committee based its unanimous recommendation on an overall analysis and on the totality of the information presented to and factors considered
by it. In addition, in considering the factors described above, individual members of the Independent Committee may have given different
weights to different factors.
The Independent
Committee also notes that:
| · | if
Atlas waives the “95% minimum tender condition” applicable to the Offers and
the Offers are accepted only to such extent that Atlas becomes the owner of Shares representing
at least 33 1/3% of Millicom’s outstanding Shares (being the “mandatory bid threshold”
under Luxembourg law), Atlas and its affiliates could continue to purchase Shares in the
open market without having paid a control premium to Shareholders who have tendered their
Shares in the Offers or ever paying a control premium in the future; and |
| · | if
Atlas acquires additional Shares in the Offers and increases its ownership of Millicom and
exercises its ability to waive the “95% minimum tender condition” applicable
to the Offers, liquidity of the Shares may be reduced, which could have an adverse effect
on Millicom’s stock price and could jeopardize the existence of an active trading market
for the Shares. |
IN LIGHT OF THE
FOREGOING, THE INDEPENDENT COMMITTEE UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS NOT ACCEPT THE OFFERS AND NOT TENDER THEIR
COMMON SHARES OR SDRs PURSUANT TO THE OFFERS.
However, the Independent
Committee considers it to be beneficial for Millicom that Atlas, as stated in the offer announcement, intends to continue to support
Millicom in the execution of its strategic plan.
| 4. | Impact
on Millicom and its employees |
In accordance with
the Takeover Rules, the Independent Committee is required, on the basis of Atlas´s statement in the press release announcing the
Offers and the related Offer to Purchase, to present its opinion regarding the impact that the implementation of the Offers will have
on Millicom, particularly on terms of employment, as well as the Independent Committee’s opinion regarding Atlas’s strategic
plans for Millicom and the effect such plans are anticipated to have on employment and on the locations where Millicom operates.
In its offer announcement
press release and the Offer to Purchase, Atlas, among other things, stated that it did not, at that point in time, anticipate that Millicom’s
business will be materially affected as a result of the Offers. Atlas also stated that it then currently had no plans, proposals or negotiations
that relate to or would result in any changes concerning Millicom’s management or employees, or to change any material term of
the employment contract of any executive officer or other employee, or any other material change in Millicom’s corporate structure,
business or with regard to Millicom’s operational sites. Atlas did, however, also note that it will conduct a detailed review of
such matters following completion of the Offers and intends to thereafter leverage the long-term knowledge and experience of Atlas and
its affiliates in the
telecoms sector
across numerous jurisdictions to explore potential synergies, focus on long-term business goals and pursue any potential strategic transactions
and acquisitions that may arise. Atlas has stated that possible changes could include changes in Millicom’s business, corporate
structure, organizational documents, capitalization, management, business development opportunities, indebtedness, dividend policy or
to the Board of Directors of Millicom.
Atlas has further
stated that, if the conditions for completion of the Offers are satisfied and the Offers are successful, following the completion of
the Offers and to the extent legally permitted by applicable law, Atlas currently intends to delist the shares from Nasdaq US and the
SDRs from Nasdaq Stockholm.
The Independent
Committee assumes that this description is accurate, has no reason to adopt a different opinion and considered this when issuing this
recommendation.
In accordance with
the Luxembourg Law of 19 May 2006 transposing Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on
takeover bids, applicable, inter alia, to matters relating to the information to be provided to the employees of Millicom, when
the Offers were made public, the Board of Directors / Independent Committee of Millicom communicated the Offers to Millicom’s employees.
Millicom’s employees shall be and have been involved by the Independent Committee in its analysis which has led to this statement
on the Offers. The Independent Committee has informed and required the advice of Millicom’s employees, in particular regarding
the effects of the Offers on all of Millicom’s interests and specifically regarding employment.
Regulatory Statement;
governing law
Certain information
contained in this release was prior to this release inside information and is information that Millicom is obliged to make public pursuant
to the EU Market Abuse Regulation. This information was submitted for publication, through the agency of the contact person set out below,
at 3:20 CET on 15 July, 2024.
This statement shall
be governed by and construed in accordance with substantive Swedish law. Any dispute arising out of or in connection with this statement
shall be settled exclusively by Swedish courts, and the District Court of Stockholm shall be the court of first instance.
US Schedule 14D-9
statement
Substantially concurrently
with the issuance of this statement as a press release, Millicom is (i) filing a Schedule 14D-9 with the US Securities and Exchange Commission,
in which the Independent Committee unanimously recommends that Shareholders not accept the Offers and not tender
their Shares pursuant to the Offers and (ii) issuing a press release summarizing such Schedule 14D-9 and such recommendation.
Cautionary Statement
In connection with
its review and evaluation of the Offers, the Independent Committee considered (i) the 2024Q2 Preliminary Financial Review, which was
the basis of the expectations that Millicom’s Equity free cash flow for full year 2024 will be above $600 million, based on results
through mid-June 2024 and taking into account potential risks that may impact performance (with this expectation not including Millicom’s
prior receipt of $46 million of net proceeds from its previously announced Colombia tower sale) and Millicom’s Leverage will end
2024 near the intermediate term target of 2.5x (collectively, the “Preliminary 2024 Expectations”) and (ii) the Long-Range
Plan, which was the basis of the Long-Range Plan
Expectations. The
2024Q2 Preliminary Financial Review and the Long-Range Plan are referred to collectively as the “Expectation Details”
and the Preliminary 2024 Expectations and the Long-Range Plan Expectations are referred to collectively as the “Expectations”.
The Expectations
included in this statement are intended solely to provide the Shareholders access to certain of the Independent Committee’s interpretations
of the Expectation Details that were made available to the Independent Committee, Millicom’s financial advisors and Nordea. The
Expectation Details and the Expectations are not being included in this statement to influence the decision of any Shareholders regarding
whether to tender Shares in the Offers or for any other purpose. The Expectation Details on which the Expectations were based may include
projections that differ from publicly available analyst estimates and projections and do not take into account any events or circumstances
after the date they were prepared, including the announcement of the Offers.
The Expectation
Details on which the Expectations were based are necessarily based on numerous variables, estimates, assumptions and judgments made by
Millicom’s management, based on information available at the time the Expectation Details were developed, with respect to industry
performance and competition, general business, economic, regulatory, market and financial conditions, other future events and matters
specific to Millicom’s business, all of which are inherently uncertain, difficult to predict and many of which are beyond Millicom’s
control. There can be no assurances that the Expectations will accurately reflect future trends or accurately estimate Millicom’s
future financial and operating performance.
Additionally, calculations
of the Expectations (and the underlying Expectation Details) assume that no capital allocation activities or transactions, including
distributions of dividends, share repurchases, strategic transactions or similar activities or transactions, have been undertaken by
Millicom in the relevant period(s).
The Expectation
Details on which the Expectations were based are also inherently based on assumptions as to certain business decisions that are subject
to change. Important factors that may affect actual results and cause the Expectations not to be achieved include, but are not limited
to, risks and uncertainties relating to Millicom’s business (including the ability to achieve strategic goals, objectives and targets
over the applicable periods), industry performance and competition, general business, economic, regulatory, market and financial conditions
and those risks and uncertainties detailed in Millicom’s public filings with the SEC, including those set forth in Millicom’s
annual report on Form 20-F for the fiscal year ended December 31, 2023, filed with the SEC on March 12, 2024, under the section entitled
“Part I — Item 3. Key Information — D. Risk Factors”. Accordingly, there can be no assurance that the Expectations
will be realized, and actual results may vary materially from the Expectations. Modeling and forecasting the future performance of a
provider of fixed and mobile telecommunications services is a highly speculative endeavor.
The Expectations
include certain financial measures which are not IFRS measures. Such financial measures should not be considered in isolation from, or
as a substitute for, financial information presented in accordance with IFRS. Millicom’s calculations of these financial measures
may differ from others in its industry and are not necessarily comparable with information presented under similar captions used by other
companies.
The Expectation
Details on which the Expectations were based were the responsibility of Millicom’s management. Neither Ernst & Young Société
anonyme (“EY”), Millicom’s independent registered public accounting firm, nor any other auditing firm, has audited,
reviewed, examined, compiled or applied agreed-upon procedures with respect to the Expectation Details and, accordingly, neither EY nor
any other auditing firm has expressed any opinion or any other form of assurance with respect thereto.
The inclusion of
the Expectations in this statement should not be regarded as an indication that Millicom, Millicom’s financial advisors, Nordea
or any of their respective affiliates, officers, directors, advisors or representatives considered or consider the Expectations to be
predictive of actual future events, and the Expectations should not be relied on as such. None of Millicom, Millicom’s financial
advisors, Nordea nor any of their respective affiliates, officers, directors, advisors or representatives can give any assurance that
actual results will not differ materially from the Expectations.
None of Millicom,
Millicom’s financial advisors, Nordea or any of their respective affiliates, officers, directors, advisors or representatives has
made or makes any representation to any Shareholder or other investor regarding the ultimate performance of Millicom compared to the
Expectations or that the Expectations will be achieved.
In light of the
foregoing factors and the uncertainties inherent in the Expectations, the Shareholders and other investors are cautioned not to place
undue, if any, reliance on the Expectations.
None of Millicom
nor any of its affiliates, officers, directors, advisors or other representatives undertakes any obligation to update or otherwise revise
or reconcile any Expectations to reflect circumstances existing after the date the Expectation Details were generated or the Expectations
were formed or to reflect the occurrence of subsequent or future events even in the event that any or all of the assumptions underlying
the Expectations are shown to be in error. Millicom undertakes no responsibility to make publicly available any update or other revision
to the Expectations except as required by law.
Use of Non-IFRS
Terms
This statement contains
financial measures that are not prepared in accordance with IFRS. These measures are referred to as “non-IFRS” measures,
and they are not uniformly or legally defined financial measures. Non-IFRS measures are not substitutes for IFRS measures in assessing
Millicom’s overall operating performance. Because non-IFRS measures are not determined in accordance with IFRS, and are susceptible
to varying calculations, non-IFRS measures may not be comparable to other similarly titled measures presented by other companies.
Millicom does not
reconcile its forward-looking non-IFRS financial measures to the nearest equivalent IFRS measures because such reconciliations are not
available without unreasonable efforts, including due to the difficulty in making accurate forecasts and projections and/or certain information
not being ascertainable or accessible.
Non-IFRS measures
are included in this statement because they are used by Millicom’s management, and Millicom believes they provide investors with
additional background for the analysis of certain information set forth in this statement. Millicom’s management uses non-IFRS
measures to make operating decisions, as they facilitate additional internal comparisons of Millicom’s performance to historical
results, and provides them to investors for additional insight into Millicom’s operating performance.
Non-IFRS measures
have limitations as analytical tools. The non-IFRS measures used by Millicom may be calculated differently from, and therefore may not
be comparable to, similarly titled measures used by other companies. In addition, non-IFRS measures should not be considered in isolation
as a substitute for, or as superior to, financial measures calculated in accordance with IFRS. Millicom’s financial results calculated
in accordance with IFRS and reconciliations to those financial statements should be carefully evaluated.
-END-
For further information,
please contact:
Press: |
Investors: |
Sofia
Corral, Director Corporate Communications
press@millicom.com |
Michel
Morin, VP Investor Relations
investors@millicom.com |
About Millicom
Millicom (NASDAQ
U.S.: TIGO, Nasdaq Stockholm: TIGO_SDB) is a leading provider of fixed and mobile telecommunications services in Latin America. Through
our TIGO® and Tigo Business® brands, we provide a wide range of digital services and products, including
TIGO Money for mobile financial services, TIGO Sports for local entertainment, TIGO ONEtv for pay TV, high-speed data, voice, and business-to-business
solutions such as cloud and security. As of March 31, 2024, Millicom, including its Honduras Joint Venture, employed approximately 15,500
people, and provided mobile and fiber-cable services through its digital highways to more than 45 million customers, with a fiber-cable
footprint over 14 million homes passed. Founded in 1990, Millicom International Cellular S.A. is headquartered in Luxembourg.
Independent Committee
of the Board of Directors
Millicom International Cellular S.A.
2, Rue du Fort Bourbon
L-1249 Luxembourg
Grand Duchy of Luxembourg
Stockholm, 12 July
2024
The Independent
Committee (the “Independent Committee”) of the Board of Directors of Millicom International Cellular S.A. (“Millicom”)
is evaluating the separate but concurrent public offers in Sweden (the “Swedish Offer”) and the United States (the
“US Offer”) made by Atlas Luxco S.à r.l. (the “Bidder”) to purchase all the outstanding
common shares with a par value of USD 1.50 per share (“Common Shares”) and Swedish Depository Receipts representing
Common Shares (“SDRs”) of Millicom that are not already owned by the Bidder or its affiliates for USD 24.00 in cash
per Common Share and per SDR (the “Offer Price”). The full terms and conditions of the Swedish Offer and the US Offer
(together, the “Offers”) are set out in the offer to purchase (the “Offer to Purchase”) (and, for
the US Offer, the accompanying letter of transmittal (together with the Offer to Purchase, the “Offer Documents”))
dated 1 July 2024 and filed by the Bidder and certain of its affiliates with the Securities and Exchange Commission. According to the
terms of the Offers, the Offer Price per SDR in SEK that will be paid to the holders of SDRs will be set based on the USD/SEK exchange
rate as close to the settlement date as the Bidder is able to achieve.
Nordea Bank Abp,
filial i Sverige, Corporate Finance (“Nordea”) has been requested by the Independent Committee to provide an opinion
in accordance with the Swedish Takeover Rules for Nasdaq Stockholm and Nordic Growth Market NGM (the “Swedish Takeover Rules”)
as to whether the Offer Price is fair, from a financial point of view, for the holders of Common Shares and SDRs (other than the Bidder
and its affiliates).
As a basis for this
opinion, Nordea has considered:
| I. | certain
historical business and financial information relating to Millicom, including annual reports
and interim reports; |
| II. | certain
financial projections for Millicom prepared by the management of Millicom and approved for
our use by the Independent Committee; |
| III. | certain
information from the management of Millicom regarding Millicom’s business, operations
and prospects, including historical development, cost structure, strategy, management, financial
position, investments and future financial prospects; |
| IV. | certain
financial projections for Millicom contained in certain securities analysts’ research
reports; |
| V. | certain
public information regarding Millicom that Nordea considered to be relevant, including historical
Common Share and SDR prices and trading volumes; |
| VI. | certain
information from external sources regarding the businesses of other companies which Nordea
considered to be relevant in evaluating those of Millicom |
Nordea Bank Abp, filial i Sverige | Smålandsgatan 17 | SE-105 71 Stockholm | Sweden | reg.no. 516411-1683
Nordea Bank Abp, a public limited liability company, Helsinki, Finland, Business ID 2858394-9, is under supervision of the Finnish Financial Supervisory Authority (Finanssivalvonta) and the European Central Bank in cooperation with the Swedish Financial Supervisory Authority (Finansinspektionen).
and
certain other transactions which Nordea considered relevant in evaluating the Offers;
| VII. | the Offer
Documents; and |
| VIII. | such
other information as Nordea deemed necessary or appropriate as a basis for this opinion. |
The information
on which this opinion is based has been obtained from publicly available sources or furnished to Nordea by Millicom or its representatives
for the purposes of this opinion. Nordea has relied upon the accuracy and completeness of such information without performing any independent
verification. Nordea has assumed, with the Independent Committee’s consent, that Millicom is not aware of any facts or circumstances
that would make such information inaccurate, inadequate or misleading in any way meaningful to Nordea’s analysis. Nordea has not
conducted an independent valuation of Millicom’s assets and liabilities.
Nordea is not a
legal, regulatory, tax or accounting expert and has relied on the assessment made by Millicom and its other advisers with respect to
any such issues.
With respect to
financial forecasts and other forward-looking information presented to Nordea by the management of Millicom, Nordea has assumed, with
the Independent Committee’s consent, that they have been reasonably prepared on bases reflecting the best currently available estimates
and judgements as to the future financial and other performance of Millicom without Nordea performing any independent assessment thereof.
This opinion is
based on current market conditions, economic, financial and other circumstances and the information obtained by or provided to Nordea
up to and including the date of this opinion. Events or circumstances occurring or becoming known after the date of this opinion may
render this opinion obsolete. Nordea assumes no obligation to update or revise this opinion to reflect such events or circumstances.
Without prejudice
to the generality of the foregoing, this opinion is given as of the date hereof and does not take into account the impact of any movement
in the USD/SEK exchange rate following the date hereof on the value of the SEK equivalent of the Offer Price to be received by holders
of SDRs upon the completion of the Offers.
This opinion does
not address the relative merits of the Offers as compared to any alternative business transactions available to Millicom or any other
investment opportunities available to the holders of Common Shares and SDRs. Furthermore, this opinion does not constitute a recommendation
to any holder of Common Shares or SDRs as to whether or not the holders of Common Shares and SDRs should accept the Offers or any other
matter.
Based on and
subject to the foregoing, it is Nordea’s opinion that, as of the date of this opinion, the Offer Price is not fair, from a financial
point of view, for the holders of Common Shares and SDRs (other than the Bidder and its affiliates).
Nordea will receive
a fixed fee for its services upon delivery of this opinion as well as cost reimbursement of certain expenses, including legal fees. No
part of the fee to Nordea is contingent upon or related to the size of the Offer Price or whether the Offers are completed or not. Millicom
has also agreed to indemnify Nordea against certain liabilities that may arise out of its engagement. Moreover, Nordea and its affiliates
have provided and may in the future provide certain investment banking, commercial banking, financial advisory and other services unrelated
to the Offers to Millicom, the Bidder and their respective affiliates and have received
or may receive customary
fees for such services, including without limitation in connection with its engagement as Joint Global Coordinator, Joint Bookrunner
and underwriter in connection with Millicom’s Rights Offering in June 2022. In addition, the Nordea group may in the ordinary course
of its trading, brokerage and investment management activities, on its own behalf or on behalf of other parties, trade or take positions
in securities directly or indirectly affected by the Offers.
This opinion is
provided solely for the benefit of the Independent Committee in connection with the Offers and in accordance with and subject to the
limitations set out in the engagement letter between Millicom and Nordea, and may not be used for any other purpose, except as specifically
set out in the engagement letter. This opinion may not, in whole or in part, be published, publicly referred to, summarised or disclosed
to or used by any other party, nor may any public reference to Nordea be made, without Nordea’s prior written consent, except as
specifically set out in the engagement letter. This opinion is not addressed to and may not be relied upon by any third party including,
without limitation, creditors, shareholders and SDR holders of Millicom.
This opinion is
being provided under, and solely for purposes of, the Swedish Takeover Rules and has been prepared following customary Swedish standards
and processes, which may differ from those customarily followed in the United States or elsewhere. This opinion shall be governed by
and construed in accordance with substantive Swedish law. Swedish courts exclusively shall settle any dispute, controversy or claim relating
to this opinion.
NORDEA
BANK ABP, FILIAL I SVERIGE
Corporate Finance
Exhibit (a)(5)(A)
Millicom’s
(Tigo) Independent Committee
Issued Recommendation Under U.S. and Swedish Rules That Shareholders and SRD Holders Reject
the Tender Offers Made by Atlas Luxco S.à r.l
Luxembourg,
July 15, 2024 – Millicom International Cellular S.A. (“Millicom”) today announced that a committee of independent
members of its Board of Directors (the “Independent Committee”), following deliberation and discussions with Millicom’s
financial advisors, has unanimously determined that the all-cash tender offers in the U.S. and Sweden (collectively, the “Offers”)
by Atlas Luxco S.à r.l and its affiliates (“Atlas”) for all outstanding common shares and SDRs in Millicom (collectively,
the “Shares”; holders of common shares and SDRs are collectively referred to as “Shareholders”) that Atlas does
not currently own at a price of USD 24 per share (and the SEK equivalent per SDR) (the “Offer Price”) significantly undervalue
Millicom and are not in the best interests of Millicom and the Shareholders.
The
Independent Committee unanimously recommends that Shareholders reject the Offers and not tender their Shares pursuant to
the Offers.
As
further detailed in the solicitation / recommendation statement on Schedule 14D-9 (the “Schedule 14D-9”) filed by Millicom
today with the Securities and Exchange Commission (the “SEC”) and published on Millicom’s website, and the statement
of the Independent Committee (the “Swedish Recommendation Statement”) made under the Takeover rules for Nasdaq Stockholm
and Nordic Growth Market NGM (the “Swedish Takeover Rules”), the Independent Committee’s recommendation that Shareholders
reject the Offers is based on the following reasons, among others:
| · | the
Offer Price significantly undervalues Millicom, including based on the following considerations: |
| o | the Offer
Price does not adequately take into account expectations based on Millicom’s long-range
plan that Millicom will generate Equity free cash flow of $659 million, $701 million and
$833 million in 2024, 2025 and 2026, respectively; |
| o | the Offer
Price does not adequately take into account that, as previously announced and based on results
through mid-June 2024, Millicom’s Equity free cash flow for full year 2024 is expected
to be above $600 million (with this expectation not including Millicom’s prior
receipt of $46 million of net proceeds from its previously announced Colombia tower sale)
and Millicom’s Leverage is expected to end 2024 near the intermediate term target of
2.5x; |
| · | the
Offer Price is well below trading multiples for comparable listed companies: |
| o | while the
average 2024 enterprise value to operating cash flow multiple of Millicom’s Trading
Peers1 is 7.4x, the Offer Price represents a 37.3% discount to the price per Share
implied by applying the same multiple to Millicom; and |
| o | while the
average Equity Free Cash Flow yield of Millicom’s Trading Peers is 10.5%, the Offer
Price represents a 30.1% discount to the price per Share implied by applying the same yield
to Millicom; |
| · | the
Offer Price represents a discount to the most recent closing price of the Shares
and the closing prices of the Shares on certain other key dates: |
| o | a discount
of 2.2% to the closing price of $24.55 per common share on June 28, 2024, the last full trading
day prior to the announcement of the Offers; |
| o | a discount
of 0.3% to the volume weighted average price of $24.10 per common share for the 30-day trading
period ending on June 28, 2024, the last full trading day prior to the announcement of the
Offers; and |
| o | a discount
of 3.1% to the closing price of $24.78 per common share on July 12, 2024, the last full trading
day prior to the date of the filing of the Schedule 14D-9; |
| · | the
average control premia to undisturbed prices observed in all-cash technology, media and telecommunications
transactions involving targets that are considered to be large publicly listed companies
in the United States and Europe over the past 15 years range between 17.4% and 46.4%, while
the Offer Price represents a mere 1.8% premium to the closing price of $23.58 per common
share on May 22, 2024, the last full trading day prior to Atlas issuing a press release announcing
that it was exploring a potential all cash tender offer for the Shares; |
| · | the
Independent Committee has received an opinion from Nordea Bank Abp, filial i Sverige, Corporate
Finance (“Nordea”) stating that, as of July 12, 2024, and based upon and subject
to the matters considered, the procedures followed, the assumptions made and various limitations
of and qualifications to the review undertaken set forth in its written opinion, the offer
price of $24.00 per common share and per SDR was not fair, from a financial point of view,
for the holders of Shares (other than Atlas and its affiliates). For further details relating
to Nordea’s opinion, please see “Opinion of Nordea” below; |
| · | if
Atlas waives the “95% minimum tender condition” applicable to the Offers and
the Offers are accepted only to such extent that Atlas becomes the owner of Shares representing
at least 33 % of Millicom’s
outstanding Shares (being the “mandatory bid threshold” under Luxembourg law),
Atlas and its affiliates could continue to purchase Shares in the open market without having
paid a control premium to Shareholders who have tendered their Shares in the Offers or ever
paying a control premium in the future; |
| · | if
Atlas acquires additional Shares in the Offers and increases its ownership of Millicom and
exercises its ability to waive the “95% minimum tender condition” applicable
to the Offers, liquidity of the Shares may be reduced, which could have an adverse effect
on Millicom’s stock price and could jeopardize the existence of an active trading market
for the Shares; |
| · | the
Offers do not adequately consider the potential value of ongoing and potential strategic
transactions and alternatives, including that Millicom may evaluate whether to distribute
dividends and/or implement a share repurchase program or otherwise return capital to its
Shareholders (i.e., given the Long-Range Plan Expectations discussed below, and in particular
Millicom’s expected anticipated cash flow generation, Millicom may, between 2024 and
2026, have excess cash sufficient to distribute dividends and/or implement a share repurchase
program); and |
| · | Atlas
states in the offer documents it filed in connection with the Offers that it reasonably believes
that the Offer Price “is fair to [u]naffiliated [s]hareholders seeking immediate
liquidity”, while the Independent Committee evaluated and bases its recommendation
on whether the Offer Price is fair to all of Millicom’s unaffiliated shareholders. |
In
evaluating the Offers and in the course of its deliberations leading to the determination to recommend that the Shareholders reject the
Offers and not tender their Shares pursuant to the Offers, the Independent Committee discussed with Millicom’s management its most
updated long-range plan for Millicom (the “Long-Range Plan”), including Millicom’s anticipated cash flow generation
contemplated thereby, and which was based, in part, on the preliminary review and report by Millicom’s management of Millicom’s
financial performance for the second quarter of 2024 (the “2024Q2 Preliminary Financial Review”), each of which continues
to be subject to review by Millicom’s management and auditor.
Accordingly,
in connection with the Offers, and to support the Shareholders in evaluating the Offers and the Independent Committee’s recommendation,
the Independent Committee observes that the Long-Range Plan presently indicates the following expectations for Millicom’s 2024
through 2026 fiscal years (the “Long-Range Plan Expectations”):
($ in
millions) |
2024E |
2025E |
2026E |
|
Equity Free Cash Flow |
659 |
701 |
833 |
|
Leverage |
2.4x |
1.9x |
1.5x |
|
The
Long-Range Plan Expectations are underpinned by, among other things, recent cash flow outperformance (as announced in a press release
issued by the Independent Committee dated June 27, 2024) and expected near-term cash flow improvement. While Millicom has gone through
a period of constrained cash flows over the last several years, given meaningful investments made by Millicom in its business activities,
including with respect to spectrum, capital expenditures and recent internal restructurings, Millicom’s management believes this
investment period is nearing conclusion and expects Millicom’s cash flow generation to significantly increase over the coming years
as reflected in the Long-Range Plan. However, the Long-Range Plan Expectations assume that no capital allocation activities or transactions,
including distributions of dividends, share repurchases, strategic transactions or similar activities or transactions, have been undertaken
by Millicom in the relevant period(s).
Accordingly,
taking into account risk-adjusted value, potential benefits, risks and uncertainties that may ultimately impact the accuracy of the Long-Range
Plan, and subject to further changes in Millicom’s business, assets, liabilities, financial condition, results of operations, management,
competitive position, prospects and operating plans, as well as industry, economic and stock and credit market conditions, the Independent
Committee believes that the intrinsic valuation of Millicom implied by the Long-Range Plan is more favorable to Millicom’s shareholders
than the valuation implied by the Offer Price.
1
“Trading Peers” include: Liberty Latin America Ltd. (LILA), America Movil S.A.B.
de C.V. (AMX), Telefonica Brasil S.A. (VIVT3), and TIM Brasil Serviços e Participações S.A. (TIMS3). Entel S.A.
(ENTEL) is not considered a relevant trading peer because of its lower profitability margins as a result of a different business model
and product mix, as well as lower trading liquidity.
Opinion
of Nordea
Nordea
was engaged to provide an opinion to the Independent Committee in accordance with the Swedish Takeover Rules as to whether the offer
price of $24.00 per common share and per SDR was fair, from a financial point of view, for the holders of common shares and SDRs (other
than Atlas and its affiliates). Nordea provided an opinion to the Independent Committee dated July 12, 2024 stating that, as of July
12, 2024, and based upon and subject to the matters considered, the procedures followed, the assumptions made and various limitations
of and qualifications to the review undertaken set forth in its written opinion, the offer price of $24.00 per common share and per SDR
was not fair, from a financial point of view, for the holders of Shares (other than Atlas and its affiliates). The full text of the written
opinion of Nordea, dated July 12, 2024, which sets forth the matters considered, the procedures followed, the assumptions made and various
limitations of and qualifications to the review undertaken in connection with such opinion, is filed as Exhibit (a)(5)(C) to the Schedule
14D-9 and is also attached to the Swedish Recommendation Statement. Nordea provided its opinion solely for the information and assistance
of the Independent Committee in connection with its consideration of the Offers. Nordea’s opinion does not constitute a recommendation
to any holder of Shares as to whether or not the holders of Shares should accept the Offers or any other matter. Nordea’s opinion
was provided under, and solely for purposes of, the Swedish Takeover Rules and was prepared following customary Swedish standards and
processes, which may differ from those customarily followed in the United States or elsewhere. For further details on Nordea’s
opinion, please see the Schedule 14D-9.
Advisors
Millicom
is receiving financial advice from Goldman Sachs International and Morgan Stanley & Co. International plc. Davis Polk & Wardwell
LLP, Nord Advokater, Advokatfirman Lindahl and Hogan Lovells (Luxembourg) LLP are providing legal advice to the Independent Committee
and Millicom.
-END-
For
further information, please contact:
Press: |
Investors: |
Sofia
Corral, Director Corporate Communications
press@millicom.com |
Michel
Morin, VP Investor Relations
investors@millicom.com |
Regulatory
Statement
This
information was submitted for publication, through the agency of the contact person set out above, at 4:00 pm CET on July 15,
2024.
About
Millicom
Millicom
(NASDAQ U.S.: TIGO, Nasdaq Stockholm: TIGO_SDB) is a leading provider of fixed and mobile telecommunications services in Latin America.
Through our TIGO® and Tigo Business® brands, we provide a wide range of digital services and products, including TIGO Money for
mobile financial services, TIGO Sports for local entertainment, TIGO ONEtv for pay TV, high-speed data, voice, and business-to-business
solutions such as cloud and security. As of March 31, 2024, Millicom, including its Honduras Joint Venture, employed approximately 15,500
people, and provided mobile and fiber-cable services through its digital highways to more than 45 million customers, with a fiber-cable
footprint over 14 million homes passed. Founded in 1990, Millicom International Cellular S.A. is headquartered in Luxembourg.
Additional
Information
In
response to the Offers, Millicom has filed with the SEC a solicitation/recommendation statement on Schedule 14D-9. MILLICOM’S
SHAREHOLDERS ARE ADVISED TO READ THE SCHEDULE 14D-9 AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BEFORE
MAKING ANY DECISION WITH RESPECT TO THE OFFERS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may obtain a copy of
the Schedule 14D-9, as well as any other documents filed by Millicom in connection with the Offers, free of charge at the SEC’s
website at www.sec.gov and on Millicom’s website at https://www.millicom.com/investors/sec-filings. In addition, investors and
Shareholders will be able to obtain free copies of these documents from Millicom by directing a request to Michel Morin, VP Investor
Relations at investors@millicom.com.
Cautionary
Statement
In
connection with its review and evaluation of the Offers, the Independent Committee considered (i) the 2024Q2 Preliminary Financial Review,
which was the basis of the expectations that Millicom’s Equity free cash flow for full year 2024 will be above $600 million, based
on results through mid-June 2024 and taking into account potential risks that may impact performance (with this expectation not including
Millicom’s prior receipt of $46 million of net proceeds from its previously announced Colombia tower sale) and Millicom’s
Leverage will end 2024 near the intermediate term target of 2.5x (collectively, the “Preliminary 2024 Expectations”) and
(ii) the Long-Range Plan, which was the basis of the Long-Range Plan Expectations. The 2024Q2 Preliminary Financial Review and the Long-Range
Plan are referred to collectively as the “Expectation Details” and the Preliminary 2024 Expectations and the Long-Range Plan
Expectations are referred to collectively as the “Expectations”.
The
Expectations included in this press release are intended solely to provide the Shareholders access to certain of the Independent Committee’s
interpretations of the Expectation Details that were made available to the Independent Committee, Millicom’s financial advisors
and Nordea. The Expectation Details and the Expectations are not being included in this press release to influence the decision of any
Shareholders regarding whether to tender Shares in the Offers or for any other purpose. The Expectation Details on which the Expectations
were based may include projections that differ from publicly available analyst estimates and projections and do not take into account
any events or circumstances after the date they were prepared, including the announcement of the Offers.
The
Expectation Details on which the Expectations were based are necessarily based on numerous variables, estimates, assumptions and judgments
made by Millicom’s management, based on information available at the time the Expectation Details were developed, with respect
to industry performance and competition, general business, economic, regulatory, market and financial conditions, other future events
and matters specific to Millicom’s business, all of which are inherently uncertain, difficult to predict and many of which are
beyond Millicom’s control. There can be no assurances that the Expectations will accurately reflect future trends or accurately
estimate Millicom’s future financial and operating performance.
Additionally,
calculations of the Expectations (and the underlying Expectation Details) assume that no capital allocation activities or transactions,
including distributions of dividends, share repurchases, strategic transactions or similar activities or transactions, have been undertaken
by Millicom in the relevant period(s).
The
Expectation Details on which the Expectations were based are also inherently based on assumptions as to certain business decisions that
are subject to change. Important factors that may affect actual results and cause the Expectations not to be achieved include, but are
not limited to, risks and uncertainties relating to Millicom’s business (including the ability to achieve strategic goals, objectives
and targets over the applicable periods), industry performance and competition, general business, economic, regulatory, market and financial
conditions and those risks and uncertainties detailed in Millicom’s public filings with the SEC, including those set forth in Millicom’s
annual report on Form 20-F for the fiscal year ended December 31, 2023, filed with the SEC on March 12, 2024 (the “2023 Annual
Report”), under the section entitled “Part I — Item 3. Key Information — D. Risk Factors”. Accordingly,
there can be no assurance that the Expectations will be realized, and actual results may vary materially from the Expectations. Modeling
and forecasting the future performance of a provider of fixed and mobile telecommunications services is a highly speculative endeavor.
The
Expectations include certain financial measures which are not IFRS measures. Such financial measures should not be considered in isolation
from, or as a substitute for, financial information presented in accordance with IFRS. Millicom’s calculations of these financial
measures may differ from others in its industry and are not necessarily comparable with information presented under similar captions
used by other companies. Please see “Non-IFRS Measures” and “Non-IFRS Financial Measure Descriptions” below for
more information about these measures.
The
Expectation Details on which the Expectations were based were the responsibility of Millicom’s management. Neither Ernst &
Young Société anonyme (“EY”), Millicom’s independent registered public accounting firm, nor any other
auditing firm, has audited, reviewed, examined, compiled or applied agreed-upon procedures with respect to the Expectation Details and,
accordingly, neither EY nor any other auditing firm has expressed any opinion or any other form of assurance with respect thereto.
The
inclusion of the Expectations in this press release should not be regarded as an indication that Millicom, Millicom’s financial
advisors, Nordea or any of their respective affiliates, officers, directors, advisors or representatives considered or consider the Expectations
to be predictive of actual future events, and the Expectations should not be relied on as such. None of Millicom, Millicom’s financial
advisors, Nordea nor any of their respective affiliates, officers, directors, advisors or representatives can give any assurance that
actual results will not differ materially from the Expectations.
None
of Millicom, Millicom’s financial advisors, Nordea or any of their respective affiliates, officers, directors, advisors or representatives
has made or makes any representation to any Shareholder or other investor regarding the ultimate performance of Millicom compared to
the Expectations or that the Expectations will be achieved.
In
light of the foregoing factors and the uncertainties inherent in the Expectations, the Shareholders and other investors are cautioned
not to place undue, if any, reliance on the Expectations.
None
of Millicom nor any of its affiliates, officers, directors, advisors or other representatives undertakes any obligation to update or
otherwise revise or reconcile any Expectations to reflect circumstances existing after the date the Expectation Details were generated
or the Expectations were formed or to reflect the occurrence of subsequent or future events even in the event that any or all of the
assumptions underlying the Expectations are shown to be in error. Millicom undertakes no responsibility to make publicly available any
update or other revision to the Expectations except as required by law.
Forward-Looking
Statements
Statements
included herein that are not historical facts, including without limitation statements concerning future strategy, plans, objectives,
expectations and intentions, projected financial results, liquidity, growth and prospects, are forward-looking statements. Such forward-looking
statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties
materialize, Millicom’s results could be materially adversely affected. In particular, there is uncertainty about global economic
activity and inflation, the demand for Millicom's products and services, and global supply chains. The risks and uncertainties include,
but are not limited to, the following:
| · | global
economic conditions, foreign exchange rate fluctuations and high inflation, as well as local
economic conditions in the markets we serve, which can be impacted by geopolitical developments
outside of our principal geographic markets, such as the armed conflict between Russia and
the Ukraine and related sanctions; |
| · | potential
disruption due to diseases, pandemics, political events, armed conflict, acts by terrorists,
including the impact of the COVID-19 virus and the ongoing efforts throughout the world to
contain it; |
| · | telecommunications
usage levels, including traffic, customer growth and the accelerated transition from traditional
to digital services; |
| · | competitive
forces, including pricing pressures, piracy, the ability to connect to other operators’
networks and our ability to retain market share in the face of competition from existing
and new market entrants as well as industry consolidation; |
| · | the
achievement of our operational goals, environmental, social and governance targets, financial
targets and strategic plans, including the acceleration of cash flow growth, the expansion
of our fixed broadband network, the reintroduction of a share repurchase program and the
reduction in net leverage; |
| · | legal
or regulatory developments and changes, or changes in governmental policy, including with
respect to the availability and terms and conditions of spectrum and licenses, the level
of tariffs, laws and regulations which require the provision of services to customers without
charging, tax matters, controls or limits on the purchase of U.S. dollars, the terms of interconnection,
customer access and international settlement arrangements; |
| · | our
ability to grow our mobile financial services business in our Latin American markets; |
| · | adverse
legal or regulatory disputes or proceedings; |
| · | the
success of our business, operating and financing initiatives and strategies, including partnerships
and capital expenditure plans; |
| · | our
expectations regarding the growth in fixed broadband penetration rates and the return that
our investment in broadband networks will yield; |
| · | the
level and timing of the growth and profitability of new initiatives, start-up costs associated
with entering new markets, the successful deployment of new systems and applications to support
new initiatives; |
| · | our
ability to create new organizational structures for the Tigo Money and Towers businesses
and manage them independently to enhance their value; |
| · | relationships
with key suppliers and costs of handsets and other equipment; |
| · | disruptions
in our supply chain due to economic and political instability, the outbreak of war or other
hostilities, public health emergencies, natural disasters and general business conditions; |
| · | our
ability to successfully pursue acquisitions, investments or merger opportunities, integrate
any acquired businesses in a timely and cost-effective manner, divest or restructure assets
and businesses, and achieve the expected benefits of such transactions; |
| · | the
availability, terms and use of capital, the impact of regulatory and competitive developments
on capital outlays, the ability to achieve cost savings and realize productivity improvements; |
| · | technological
development and evolving industry standards, including challenges in meeting customer demand
for new technology and the cost of upgrading existing infrastructure; |
| · | cybersecurity
threats, a security breach or other significant disruption of our IT systems or those of
our business partners, suppliers or customers; |
| · | the
capacity to upstream cash generated in operations through dividends, royalties, management
fees and repayment of shareholder loans; and |
| · | other
factors or trends affecting our financial condition or results of operations. |
A
further list and description of risks, uncertainties and other matters can be found in the 2023 Annual Report, including those risks
outlined in “Part I — Item 3. Key Information — D. Risk Factors”, and in Millicom’s subsequent SEC filings,
all of which are available at www.sec.gov. All forward-looking statements attributable to us or any person acting on our behalf are expressly
qualified in their entirety by this cautionary statement. Readers are cautioned not to place undue reliance on these forward-looking
statements that speak only as of the date hereof. Except to the extent otherwise required by applicable law, we do not undertake any
obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.
Non-IFRS
Measures
This
press release contains financial measures not prepared in accordance with IFRS. These measures are referred to as “non-IFRS”
measures and include: non-IFRS service revenue, non-IFRS EBITDA, and non-IFRS Capex, among others. The non-IFRS financial measures are
presented in this press release as Millicom’s management believes they provide investors with an additional information for the
analysis of Millicom’s results of operations, particularly in evaluating performance from one period to another. Millicom’s
management uses non-IFRS financial measures to make operating decisions, as they facilitate additional internal comparisons of Millicom’s
performance to historical results and to competitors' results, and provides them to investors as a supplement to Millicom’s reported
results to provide additional insight into Millicom’s operating performance. Millicom’s Remuneration Committee uses certain
non-IFRS measures when assessing the performance and compensation of employees, including Millicom’s executive directors.
The
non-IFRS financial measures used by Millicom may be calculated differently from, and therefore may not be comparable to, similarly titled
measures used by other companies - refer to the section “Non-IFRS Financial Measure Descriptions” for additional information.
In addition, these non-IFRS measures should not be considered in isolation as a substitute for, or as superior to, financial measures
calculated in accordance with IFRS, and Millicom’s financial results calculated in accordance with IFRS and reconciliations to
those financial statements should be carefully evaluated.
Non-IFRS
Financial Measure Descriptions
Service
revenue is revenue related to the provision of ongoing services such as monthly subscription fees for mobile and broadband, airtime and
data usage fees, interconnection fees, roaming fees, mobile finance service commissions and fees from other telecommunications services
such as data services, short message services, installation fees and other value-added services excluding telephone and equipment sales.
EBITDA
is operating profit excluding impairment losses, depreciation and amortization, and gains/losses on fixed asset disposals.
EBITDA
after Leases (EBITDAaL) represents EBITDA after lease interest expense and depreciation charge.
EBITDA
Margin represents EBITDA in relation to Revenue.
Organic
growth represents year-on-year growth excluding the impact of changes in FX rates, perimeter, and accounting. Changes in perimeter are
the result of acquisitions and divestitures. Results from divested assets are immediately removed from both periods, whereas the results
from acquired assets are included in both periods at the beginning (January 1) of the first full calendar year of ownership.
Net
debt is Debt and financial liabilities, including derivative instruments (assets and liabilities), less cash and pledged and time deposits.
Leverage
is the ratio of net debt over LTM (Last twelve month) EBITDAaL, proforma for acquisitions made during the last twelve months.
Capex
is balance sheet capital expenditure excluding spectrum and license costs and lease capitalizations.
Cash
Capex represents the cash spent in relation to capital expenditure, excluding spectrum and licenses costs.
Operating
Cash Flow (OCF) is EBITDA less Capex.
Operating
Free Cash Flow (OFCF) is EBITDA, less cash capex, less spectrum paid, working capital and other non-cash items, and taxes paid.
Equity
Free Cash Flow (EFCF) is OFCF less finance charges paid (net), lease interest payments, lease principal repayments, and advances for
dividends to non-controlling interests, plus cash repatriation from joint ventures and associates.
Operating
Profit After Tax displays the profit generated from the operations of the company after statutory taxes.
Return
on Invested Capital (ROIC) is used to assess the Group’s efficiency at allocating the capital under its control to and is defined
as Operating Profit After Tax divided by the average invested Capital during the period.
Average
Invested Capital is the capital invested in the company operation throughout the year and is calculated with the average of opening and
closing balances of the total assets minus current liabilities (excluding debt, joint ventures, accrued interests, deferred and current
tax, cash as well as investments and non-controlling interests), less assets and liabilities held for sale.
Average
Revenue per User per Month (ARPU) for our Mobile customers is (x) the total mobile and mobile financial services revenue (excluding revenue
earned from tower rentals, call center, data and mobile virtual network operator, visitor roaming, national third parties roaming and
mobile telephone equipment sales revenue) for the period, divided by (y) the average number of mobile subscribers for the period, divided
by (z) the number of months in the period. We define ARPU for our Home customers as (x) the total Home revenue (excluding equipment sales
and TV advertising) for the period, divided by (y) the average number of customer relationships for the period, divided by (z) the number
of months in the period. ARPU is not subject to a standard industry definition and our definition of ARPU may be different from other
industry participants.
Please
refer to our Current Report of Form 6-K, filed with the SEC on June 28, 2024, for a list and description of non-IFRS measures.
Other
Disclaimers
Morgan
Stanley & Co. International plc (“Morgan Stanley”) and Goldman Sachs International (“Goldman Sachs”) are
acting as financial advisors to Millicom and to no one else. Morgan Stanley and Goldman Sachs are authorised by the Prudential Regulation
Authority (“PRA”) and regulated by the Financial Conduct Authority and the PRA. In connection with such matters, Morgan Stanley’s
and Goldman Sachs’ and their respective affiliates’ respective directors, officers, employees and agents will not regard
any other person as its client, nor will Morgan Stanley or Goldman Sachs be responsible to anyone other than Millicom for providing the
protections afforded to their clients or for providing advice in connection with the matters described in this announcement or any matter
referred to herein.
Exhibit (a)(5)(C)
Independent Committee of the Board of Directors
Millicom International Cellular S.A.
2, Rue du Fort Bourbon
L-1249 Luxembourg
Grand Duchy of Luxembourg
Stockholm, 12 July 2024
The Independent Committee (the “Independent
Committee”) of the Board of Directors of Millicom International Cellular S.A. (“Millicom”) is evaluating
the separate but concurrent public offers in Sweden (the “Swedish Offer”) and the United States (the “US Offer”)
made by Atlas Luxco S.à r.l. (the “Bidder”) to purchase all the outstanding common shares with a par value of
USD 1.50 per share (“Common Shares”) and Swedish Depository Receipts representing Common Shares (“SDRs”)
of Millicom that are not already owned by the Bidder or its affiliates for USD 24.00 in cash per Common Share and per SDR (the “Offer
Price”). The full terms and conditions of the Swedish Offer and the US Offer (together, the “Offers”) are
set out in the offer to purchase (the “Offer to Purchase”) (and, for the US Offer, the accompanying letter of transmittal
(together with the Offer to Purchase, the “Offer Documents”)) dated 1 July 2024 and filed by the Bidder and certain
of its affiliates with the Securities and Exchange Commission. According to the terms of the Offers, the Offer Price per SDR in SEK that
will be paid to the holders of SDRs will be set based on the USD/SEK exchange rate as close to the settlement date as the Bidder is able
to achieve.
Nordea Bank Abp, filial i Sverige, Corporate Finance
(“Nordea”) has been requested by the Independent Committee to provide an opinion in accordance with the Swedish Takeover
Rules for Nasdaq Stockholm and Nordic Growth Market NGM (the “Swedish Takeover Rules”) as to whether the Offer Price
is fair, from a financial point of view, for the holders of Common Shares and SDRs (other than the Bidder and its affiliates).
As a basis for this opinion, Nordea has considered:
| I. | certain historical business and financial information relating to Millicom, including annual reports and
interim reports; |
| II. | certain financial projections for Millicom prepared by the management of Millicom and approved for our
use by the Independent Committee; |
| III. | certain information from the management of Millicom regarding Millicom’s business, operations and
prospects, including historical development, cost structure, strategy, management, financial position, investments and future financial
prospects; |
| IV. | certain financial projections for Millicom contained in certain securities analysts’ research reports; |
| V. | certain public information regarding Millicom that Nordea considered to be relevant, including historical
Common Share and SDR prices and trading volumes; |
Nordea Bank Abp, filial i Sverige | Smålandsgatan 17 | SE-105 71 Stockholm | Sweden | reg.no. 516411-1683
Nordea Bank Abp, a public limited liability company, Helsinki, Finland, Business ID 2858394-9, is under supervision of the Finnish Financial Supervisory Authority (Finanssivalvonta) and the European Central Bank in cooperation with the Swedish Financial Supervisory Authority (Finansinspektionen).
| VI. | certain information from external sources regarding the businesses of other companies which Nordea considered
to be relevant in evaluating those of Millicom and certain other transactions which Nordea considered relevant in evaluating the Offers; |
| VII. | the Offer Documents; and |
| VIII. | such other information as Nordea deemed necessary or appropriate as a basis for this opinion. |
The information on which this opinion is based
has been obtained from publicly available sources or furnished to Nordea by Millicom or its representatives for the purposes of this opinion.
Nordea has relied upon the accuracy and completeness of such information without performing any independent verification. Nordea has assumed,
with the Independent Committee’s consent, that Millicom is not aware of any facts or circumstances that would make such information
inaccurate, inadequate or misleading in any way meaningful to Nordea’s analysis. Nordea has not conducted an independent valuation
of Millicom’s assets and liabilities.
Nordea is not a legal, regulatory, tax or accounting
expert and has relied on the assessment made by Millicom and its other advisers with respect to any such issues.
With respect to financial forecasts and other forward-looking
information presented to Nordea by the management of Millicom, Nordea has assumed, with the Independent Committee’s consent, that
they have been reasonably prepared on bases reflecting the best currently available estimates and judgements as to the future financial
and other performance of Millicom without Nordea performing any independent assessment thereof.
This opinion is based on current market conditions,
economic, financial and other circumstances and the information obtained by or provided to Nordea up to and including the date of this
opinion. Events or circumstances occurring or becoming known after the date of this opinion may render this opinion obsolete. Nordea assumes
no obligation to update or revise this opinion to reflect such events or circumstances.
Without prejudice to the generality of the foregoing,
this opinion is given as of the date hereof and does not take into account the impact of any movement in the USD/SEK exchange rate following
the date hereof on the value of the SEK equivalent of the Offer Price to be received by holders of SDRs upon the completion of the Offers.
This opinion does not address the relative merits
of the Offers as compared to any alternative business transactions available to Millicom or any other investment opportunities available
to the holders of Common Shares and SDRs. Furthermore, this opinion does not constitute a recommendation to any holder of Common Shares
or SDRs as to whether or not the holders of Common Shares and SDRs should accept the Offers or any other matter.
Based on and subject to the foregoing, it is
Nordea’s opinion that, as of the date of this opinion, the Offer Price is not fair, from a financial point of view, for the holders
of Common Shares and SDRs (other than the Bidder and its affiliates).
Nordea will receive a fixed fee for its services
upon delivery of this opinion as well as cost reimbursement of certain expenses, including legal fees. No part of the fee to Nordea is
contingent upon or related to the size of the Offer Price or whether the Offers are completed or not. Millicom has also agreed to indemnify
Nordea against certain liabilities that may arise out of its engagement. Moreover, Nordea and its affiliates have provided and may in
the future provide certain investment banking, commercial banking, financial advisory and other services unrelated to the Offers to Millicom,
the Bidder and their respective affiliates and have received or may receive customary fees for such services, including without limitation
in connection with its engagement as Joint Global Coordinator, Joint Bookrunner and underwriter in connection with Millicom’s Rights
Offering in June 2022. In addition, the Nordea group may in the ordinary course of its trading, brokerage and investment management activities,
on its own behalf or on behalf of other parties, trade or take positions in securities directly or indirectly affected by the Offers.
This opinion is provided solely for the benefit
of the Independent Committee in connection with the Offers and in accordance with and subject to the limitations set out in the engagement
letter between Millicom and Nordea, and may not be used for any other purpose, except as specifically set out in the engagement letter.
This opinion may not, in whole or in part, be published, publicly referred to, summarised or disclosed to or used by any other party,
nor may any public reference to Nordea be made, without Nordea’s prior written consent, except as specifically set out in the engagement
letter. This opinion is not addressed to and may not be relied upon by any third party including, without limitation, creditors, shareholders
and SDR holders of Millicom.
This opinion is being provided under, and solely
for purposes of, the Swedish Takeover Rules and has been prepared following customary Swedish standards and processes, which may differ
from those customarily followed in the United States or elsewhere. This opinion shall be governed by and construed in accordance with
substantive Swedish law. Swedish courts exclusively shall settle any dispute, controversy or claim relating to this opinion.
NORDEA BANK ABP, FILIAL I SVERIGE
Corporate Finance
Exhibit (e)(1)
DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES
Directors and Senior Management (including
Share Ownership)
See "Corporate GovernanceBoard GovernanceBoard
Profile: Skills and Experience" for more information on our directors and senior management.
Compensation
For the financial year ended December 31, 2023,
the total compensation paid to MIC S.A.s directors was $1.7 million and to the CEO and CFO the total cash compensation plus benefits (excluding
pension) was $4.1 million. The total amounts set aside or accrued by Millicom to provide pension, retirement or similar benefits for the
CEO and CFO was $0.5 million.
The Company provides information on the
individual compensation of its directors and certain members of its executive management in its annual report filed with the Registre
de Commerce et des Sociétés (Luxembourg Trade and Companies Register), the Sociétés de la Bourse
de Luxembourg S.A. (Luxembourg Stock Exchange) and the Commission de Surveillance du Secteur Financier (CSSF). As that
annual report is made publicly available, the relevant individual compensation information it contains for directors and executive
management is included below.
Remuneration of Directors
Decisions on annual remuneration of directors (tantiémes)
are reserved by the Articles of Association to the general meeting of shareholders. Directors are prevented from voting on their own compensation.The
remuneration of the non-executive members of the Board of Directors comprises an annual fee and shares of MIC S.A. The remuneration is
100% fixed. Non-executive directors do not receive any fringe benefits, pensions or any form of variable remuneration. No remuneration
was paid to any of the non-executive directors in 2023 or 2022 from any other undertakings within the Millicom Group.
Director remuneration is proposed by the Nomination
Committee and approved by the shareholders at the AGM or other shareholders meetings. During early 2023, in proposing Director Remuneration,
the Nomination Committee, received input from an external compensation advisor, including market and peer benchmarking, and considered
the frequency of meetings and complexity of Millicoms business and governance structures. After consideration of these and other relevant
aspects, the Nomination Committee proposed to keep the structure and propose no increase in the amount of remuneration for each role for
the non-executive directors. In accordance with resolution 18 adopted by the AGM on May 31, 2023, the Nomination Committee of Millicom
was instructed to propose Director remuneration for the period from the date of the 2023 AGM to the date of the AGM in 2024.
At the AGM held on May 31, 2023, MIC S.A.s shareholders
approved the compensation for the nine non-executive directors expected to serve from that date until the 2024 AGM consisting of two components:
(i) cash-based compensation and (ii) share-based compensation. The share-based compensation is in the form of fully paid-up shares of
MIC S.A. Such shares are provided from the Companys treasury shares or if permitted, alternatively issued within MIC S.A.s authorized
share capital exclusively in exchange for the allocation from the share premium reserve (i.e., for nil consideration from the relevant
directors), in each case divided by the average Millicom closing share price on the Nasdaq in the US for the three-month period ending
April 30, 2023, or US$18.75 per share, provided that shares shall not be issued below the par value. Executive Directors do not receive
any remuneration in their capacity as Directors.
In respect of directors who do not serve an entire
term from the 2023 AGM until the 2024 AGM, the fee-based and the share-based compensation is pro-rated pro rata temporis.
Director remuneration (Board and Committees) for
the year ended December 31, 2023 and December 31, 2022 (covering the period from May 31, 2023 to the date of the AGM in May 2024 as resolved
at the shareholder meeting on May 31, 2023) is set forth in the following table. See Board Committees section, starting on page 144
for details on those Directors that are also committee members.
|
2023 |
2022 |
Name of Director |
Cash-based fee |
Share-based fee (i) |
Total |
Cash-based fee |
Share-based fee (i) |
Total |
In thousands of USD |
Mr. José Antonio Ríos García- Former chair of the Board (ii) |
$105.0 |
$210.0 |
$315.0 |
$105.0 |
$210.0 |
$315.0 |
Ms. Pernille Erenbjerg - Deputy Chair of the Board |
$100.0 |
$160.0 |
$260.0 |
$100.0 |
$160.0 |
$260.0 |
Ms. Maria Teresa Arnal (since May 2023) |
$67.5 |
$105.0 |
$172.5 |
Not Applicable |
Mr. Bruce Churchill |
$90.0 |
$105.0 |
$195.0 |
$77.5 |
$105.0 |
$182.5 |
Mr. Tomas Eliasson |
$100.0 |
$105.0 |
$205.0 |
$90.0 |
$105.0 |
$195.0 |
Mr. Michael Golan (since May 2023) (iii) |
|
|
|
Not Applicable |
Mr. Nicolas Jaeger (since May 2023) |
$67.5 |
$105.0 |
$172.5 |
Not Applicable |
Mr. Thomas Reynaud (since May 2023) |
$67.5 |
$105.0 |
$172.5 |
Not Applicable |
Ms. Blanca Treviño Vega (since May 2023) |
$77.5 |
$105.0 |
$182.5 |
Not Applicable |
Former Directors (in all cases, until May 2023) |
|
|
|
|
|
|
Mr. Odilon Almeida - Former Chair of the Compliance and Business Conduct |
Not Applicable |
$80.0 |
$105.0 |
$185.0 |
Ms. Mercedes Johnson - Former Chair of the Audit and Compliance Committee |
Not Applicable |
$112.5 |
$105.0 |
$217.5 |
Mr. Lars-Johan Jarnheimer |
Not Applicable |
$67.5 |
$105.0 |
$172.5 |
Mr. James Thompson |
Not Applicable |
$90.0 |
$105.0 |
$195.0 |
Total (iv) |
$675.0 |
$1,000.0 |
$1,675.0 |
$722.5 |
$1,000.0 |
$1,722.5 |
| (i) | Share-based
compensation for the period from May 31 2023to May 2024 was calculated by dividing the approved
remuneration by the average Millicom closing share price on the Nasdaq in the US for the
three-month period ending April 30, 2023 and represented a total of 53,343 shares. Total
remuneration for the period from May31, 2023 to May 2024 after deduction of applicable withholding
tax at source comprised 75% in shares and 25% in cash. |
| (ii) | Mr. Rios
Garcia resigned from the board of directors on August 31, 2023. |
| (iii) | Mr. Golan
declined to receive any director remuneration. |
| (iv) | Total remuneration
for the period from May 31, 2023 to May 2024 after deduction of applicable withholding tax
at source comprised 75% in shares and 25% in cash (2022: 73% in shares and 27% in cash). |
Remuneration of Executive Management
See Compensation
and
Talent
Committee's Report section, starting on page 128.
Related Party Transactions
The related party transactions disclosures in our audited consolidated financial
statements are in some respects broader than that required by Form 20-F. For purposes of consistency of presentation, references to "related
parties" refer to the broader definition that is used in our audited consolidated financial statements. The Company conducts transactions
with certain related parties on normal commercial terms and conditions as described in Note G.5. to our audited consolidated financial
statements .
Shareholders
and Representation of Shareholders
Shareholders and Shareholders Meeting
The shareholders meeting is Millicom's highest
decision-making body and a forum for shareholders to voice their opinions. Each shareholder has the right to participate in the shareholders
meeting and to cast one vote for every share. Shareholders unable to attend in person may exercise their rights by proxy or vote in writing
(by way of proxies).
Millicoms Articles of Association set the Annual
General Meeting of Shareholders (AGM) to be held in Luxembourg within six months of the close of the financial year.
Unless otherwise required under Luxembourg Law,
an extraordinary general meeting (EGM) must be convened to amend the Articles of Association.
At the 2023 AGM, held in Luxembourg on May 31,
2023, shareholders approved all the resolutions proposed by the Board and Nomination Committee, including the following key items:
| • | the annual accounts and the consolidated
accounts for the year ended December 31, 2022; |
| • | the allocation of the profit of
approximately $2 million of the 2022 results to the legal reserve, and the remaining $36 million to unappropriated net profits to be
carried forward; |
| • | the discharge of all current and
former Millicom Directors who served at any point in time during the financial year ended December 31, 2022, for the performance of their
mandates; |
| • | the establishment of the number
of Directors at ten (10) and election of the Board members and Chair of the Board (see "—Board Governance—Board Profile:
Skills and Experience); |
| • | the re-election of Ernst &
Young S.A., Luxembourg as Millicom's external auditor; |
| • | the remuneration to the Board
members and external auditor; |
| • | the instruction to the Nomination
Committee; |
| • | the share repurchase plan; |
| • | the 2022 Remuneration Report; |
| • | the senior management remuneration
policy; and |
| • | the share-based incentive plans
for Millicom employees. |
On May 31, 2023 an Extraordinary General Meeting
(the EGM) was held to increase the authorized share capital of the Company from three hundred million United States Dollars (USD 300,000,000)
divided into two hundred million (200,000,000) shares with a par value of one dollar fifty cents (USD 1.50) each, to three hundred and
seventy five million United States Dollars (USD 375,000,000) divided into two hundred and fifty million (250,000,000) shares with a par
value of one dollar fifty cents (USD 1.50) each, and to renew the authorization granted to the Board of Directors to issue new shares
up to a share capital of USD 375,000,000 divided into 250,000,000 shares with a par value of USD 1.50 per share, until May 31, 2028, and
to amend the articles of association to incorporate these amendments. These resolutions were rejected.
On February 28, 2022, an Extraordinary General
Meeting (the EGM) was held to increase the authorized share capital and amend the articles of association in preparation for the rights
offering that was announced during the first quarter of 2022. The EGM resolved to increase the Companys authorized share capital from
133.3 million to 200 million ordinary shares, par value $1.50 per share. In June 2022, approximately 70.3 million ordinary shares were
issued pursuant to the rights offering at a price of $10.61 per share.
Millicom governance deviated in 2023 in relation
to the Swedish Code in the following areas:
Code requirement |
Millicom practice |
Explanation |
1.5A shareholder,
or a proxy representative of a shareholder, who is neither a member of the board nor an employee of the company is to be appointed
to verify and sign the minutes of the shareholders meeting. |
Minutes are signed
by the Chair of the shareholders meeting (who is not a member of the Board or an employee of the Company), the meeting secretary
and an appointed scrutineer. |
Millicom is a legal
entity incorporated in Luxembourg and, as such, it follows Luxembourg Law in connection with procedures and rules for its shareholders
meetings. |
2.3-Neither the
chief executive officer nor other members of the executive management are to be members of the nomination committee. |
Mr. Mauricio Ramos,
the Interim Chair of the Board of Millicom, and its Chief Executive Officer, is a member of the nomination committee. |
It follows from
the Instruction to the Nomination Committee, resolved on May 31, 2023 at the annual general meeting of the Company, that the Chair
of the Board shall be a member of the Committee. On August 31, 2023 Mr. Ramos was, after the resignation of the then current Chair,
appointed as the Interim Chair of the Board, resulting in non-compliance with rule 2.3. After the 2024 AGM, Mauricio Ramos is expected
to step down as CEO of the Company and remain as Executive Chair only. |
2.4 Neither the company chair nor
any other member of the board may chair the nomination committee. |
On February 26, 2024, Aude Durand, the Chair of Millicoms
Nomination Committee, was elected as a member of the Board of Millicom. |
Following the tragic passing of Nicolas Jaeger, after
consultation and with the approval of the Nomination Committee, the Board of Millicom appointed Ms. Durand as a replacement for Mr.
Jaeger on the Board until the companys next AGM. |
Major Shareholders
To the extent known to the Company, it is neither
directly nor indirectly owned or controlled by another corporation, any government, or any other person. In addition, there are no arrangements,
known to the Company, the operation of which may result in a change in its control in the future.
The table below sets out beneficial ownership of
our common shares (directly or through SDRs), par value $1.50 each, by each person who beneficially owned more than 5% of our common shares.
Name of Shareholder |
|
Common Shares |
|
Percentage of Share Capital |
Xavier Niel (1) |
|
49,966,734 |
|
|
29.14 |
% |
Dodge & Cox (2) |
|
8,674,932 |
|
|
5.1 |
% |
| (1) | Information
herein is based upon a Schedule 13D filed with the SEC on January 17, 2024 by Atlas Luxco
S.à r.l., Atlas Investissement, NJJ Holding and Xavier Niel. Atlas Luxco S.à r.l.,
Atlas Investissement, NJJ Holding and Xavier Niel held 49,966,734 of our common shares (approximately
29.14% of common shares outstanding) as of January 17, 2024. The sole owner of Atlas Luxco
S.à r.l. at December 31, 2023 was Atlas Investissement. The sole owner of Atlas Investissement
at December 31, 2023 was NJJ Holding. The sole owner of NJJ Holding is Xavier Niel, and as
a result, Xavier Niel is deemed to be a beneficial owner of NJJ Holding, Atlas Investissement
and Atlas Luxco S.à r.l. As of December 31, 2022, Xavier Niel held 12,046,741 of our
common shares (7.0% of common shares then outstanding). On March 8, 2024, we were informed
by Atlas Luxco S.à r.l. that Michael Shalom Golan, a member of our Board of Directors,
is an ultimate beneficiary of 2.5% of Atlas Luxco S.à r.l. |
| (2) | Information
herein is based upon an Amendment No. 1 to Schedule 13G filed with the SEC on February 13,
2024. |
Except as otherwise indicated, the holders listed
above (holders) have sole voting and investment power with respect to all shares beneficially owned by them. The holders have the same
voting rights as all other holders of MIC S.A. common shares. For purposes of this table, a person or group of persons is deemed to have
beneficial ownership of any shares as of a given date which such person or group of persons has the right to acquire within 60 days after
such date. For purposes of computing the percentage of outstanding shares held by the holders on a given date, any security which such
holder has the right to acquire within 60 days after such date (including shares which may be acquired upon exercise of vested portions
of share options) is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership
of any other person.
Based upon the SDR ownership reported by Euroclear
Sweden AB, as of December 31, 2023, there were 117 SDR holders in the United States holding 28,294,954 SDRs (representing 16.4% of the
outstanding share capital as of such date). According to the records held by Broadridge Corporate Issuer Solutions Inc. reported as of
December 31, 2023, there were 74 shareholder accounts in the United States holding 14,356,729 common shares (representing 8.3% of the
outstanding share capital as of such date). However, these figures may not be an accurate representation of the number of beneficial holders
nor their actual location because most of the common shares and SDRs were held for the account of brokers or other nominees.
Nomination
Committee
Millicom's prior Nomination Committee, which was
elected in October 2022 and served until the appointment of a new Committee in October 2023, was composed of:
Member |
On behalf of |
Position |
Mr. Jan Dworsky |
Swedbank Robur |
Chair |
Mr. Viktor Kockberg |
Nordea Investment Funds |
Member |
Mr. Staley Cates |
Southeastern Asset Management |
Member |
Mr. Gerardo Zamorano |
Brandes Investment Partners |
Member |
Mr. José Antonio Ríos García |
Appointed by shareholders at the 2022 AGM |
Member |
Mr. Nicolas Jaeger (from March 23, 2023 to May 31, 2023) |
Atlas Luxco |
Member |
Ms. Aude Durand (from May 31, 2023) |
Atlas Luxco |
Member |
Millicom's current Nomination Committee, elected
in October 2023 is composed of:
Member |
On behalf of: |
Position |
Ms. Aude Durand |
Atlas Luxco |
Chair |
Mr. Jan Dworsky |
Swedbank Robur |
Member |
Mr. Staley Cates |
Southeastern Asset Management |
Member |
Mr. Mauricio Ramos |
Appointed by shareholders at the 2023 AGM |
Member |
The Nomination Committee is appointed by the largest
shareholders of Millicom. It is not a Board committee. Its role is to propose resolutions regarding electoral and remuneration issues
to the shareholders meeting in a manner that promotes the common interest of all shareholders, regardless of how they are appointed. Nomination
Committee members' terms of office typically begin at the time of the announcement of the interim report (covering the period from January
to September of each year) and end when a new Nomination Committee is formed.
Under the terms of the Nomination Committee procedure,
the committee consists of (i) three members appointed by the largest shareholders as of the last business day of June 2023 and (ii) the
Company's Chair of the Board.
The Company's Articles of Association stipulate
that the Nomination Committee rules and procedures of the Swedish Code of Corporate Governance shall be applied for the election of Directors
to the Company's Board of Directors, as long as such compliance does not conflict with applicable mandatory law, applicable regulation
or the mandatory rules of any stock exchange on which the Companys shares are listed.
Nomination Committee proposals to the
AGM include, among others:
| • | Election and remuneration of Directors
of the Board and the Chair of the Board |
| • | Appointment and remuneration of
the external auditor |
| • | Proposal of the Chairman of the
AGM |
Promoting Board Diversity
Millicoms Nomination Committee recognizes the importance
of diversity for promoting strong corporate governance, competitive advantage and effective decision-making. The Nomination Committee
is responsible for determining the appropriate skills, perspectives and experiences required of Board candidates based on the Companys
strategic needs and the current Board composition. This determination will include knowledge, experience and skills in areas that are
critical to understanding the Company and its business; richness of views brought by different personal attributes, such as gender, race,
age and nationality; other personal characteristics, such as integrity and judgment; and candidates commitment to the boards of other
publicly held companies.
In its work, the Nomination Committee applies rule
4.1 of the Swedish Corporate Governance Code as its diversity policy.
Board Diversity
Matrix (As of December 31, 2023)
Country of Principal Executive Offices Home Country: |
Luxembourg |
Foreign Private Issuer |
Yes |
Disclosure Prohibited Under Home Country Law |
No |
Total Number of Directors |
9 |
|
Female |
Male |
Non-Binary |
Did Not Disclose Gender |
|
Part I: Gender Identity |
Directors |
3 |
6 |
0 |
0 |
|
Part II: Demographic Background |
Underrepresented Individual in Home Country Jurisdiction |
3 |
LGBTQ+ |
0 |
Did not disclose demographic background |
0 |
Board Diversity
Matrix (As of December 31, 2022)
Country of Principal Executive Offices Home Country: |
Luxembourg |
Foreign Private Issuer |
Yes |
Disclosure Prohibited Under Home Country Law |
No |
Total Number of Directors |
9 |
|
Female |
Male |
Non-Binary |
Did Not Disclose Gender |
|
Part I: Gender Identity |
Directors |
2 |
7 |
0 |
0 |
|
Part II: Demographic Background |
Underrepresented Individual in Home Country Jurisdiction |
4 |
LGBTQ+ |
0 |
Did not disclose demographic background |
0 |
Board Governance
Written charters set out the objectives, limits
of authority, organization and roles and responsibilities of the Board and each of its committees.
Board of Directors and Board Committees
The Chair convenes the Board and leads its work.
The Chair is accountable to the Board and acts as a direct liaison between the Board and the management of the Company through the CEO.
Meeting agendas are set with the CEO, and the Chair communicates Board decisions where appropriate.
Role of the Board
The Board is responsible for approving Millicoms
strategy, financial objectives and operating plans, and for oversight of governance. The Board also plans for succession of the CEO and
reviews other senior management positions.
As set forth in the Companys Articles of Association,
the Board must be composed of at least six members. The 2023 AGM set the number of Directors at ten, comprising a Chair, a Deputy Chair
and seven members. On August 31, 2023 the Chair resigned from the Board and the role of Chair was assigned to the Executive Director /
CEO and from that time and at December 31, 2023 the Board comprised of eight Non-Executive Directors and one Executive Director (the CEO
of Millicom). On February 26, 2024, Millicom announced the appointment of Aude Durand to its Board of Directors. In accordance with Millicoms
Articles of Association, Millicoms Board of Directors, with the approval of Millicoms Nomination Committee, appointed Ms. Durand to fill
the vacant Board position created by the tragic passing of Nicolas Jaeger until the next Annual General Meeting of shareholders.
The Board selects the CEO, who is charged with
daily management of the Company and its business. The CEO is responsible for recruiting the senior management of the Company. The Board
reviews plans for key senior management positions; supervises, supports and empowers the senior management team; and monitors senior managers'
performance. In accordance with the Swedish Code, the division of work between the Board and the CEO is set forth in The Rules of Procedure,
Instructions to the CEO and Reporting Instructions.
Further details on the roles and activities of
the various committees, as well as their responsibilities and activities, appear later in this section.
Powers and Limitations of the Board
Borrowing powers: The Board has unrestricted borrowing
powers on behalf of, and for the benefit of, Millicom.
Time and age limit: No age limit exists for being
a Director of Millicom. Directors mandates can be for a maximum of six years before either being re-elected or ending their service. There
are no restrictions on the maximum continuous period that a Director can serve. The current Directors have been elected for a term starting
on the date of the 2023 AGM and ending on the date of the 2024 AGM (i.e., for approximately one year).
Restrictions on voting: No contract or other transaction
between the Company and any other person shall be affected or invalidated by the fact that any Director, officer or employee of the Company
has a personal interest inor is a Director, officer or employee ofsuch other person. However, the following conditions apply:
| • | The contract or transaction must be negotiated on an arms-length
basis on terms no less favorable to the Company than could have been obtained from an unrelated third party; and, in the case of a Director,
he or she shall inform the Chair of his or her conflict of interest and abstain from deliberating and voting on any matters that pertain
to such contract or transaction at any meeting of the Board. |
| • | Any such personal interest shall be fully disclosed to the Company
by the relevant Director, officer or employee and, to the extent a Director is involved, to the next general meeting of shareholders. |
| • | Director's service agreements: None of MIC S.A's current directors
have entered into service agreements with the Millicom Group or any of its subsidiaries providing for benefits upon termination of their
respective directorships. |
Share Ownership Requirements
Non-Executive Directors are not required to be
shareholders of the Company. Share ownership of Directors is included in the Director biographies set out on the following pages. Directors
and Non-Executive Directors collectively own less than 1% of the Company's outstanding shares as of January 31, 2024.
Insider Trading Policy
The Company has an insider trading policy governing
the purchase, sale and other dispositions of our securities by directors, senior management and employees that are reasonably designed
to promote compliance with applicable insider trading laws, rules and regulations, and any listing standards applicable to the Company.
Roles
Chair of the Board
The Chair is elected by the AGM. If the Chair relinquishes
the position during the mandate period, the Board elects a new Chair from among its members to serve until the end of the next AGM. The
Board Chair convenes the Board and leads its work, coordinates with the CEO to set the meeting agendas and serves as the Board's liaison
to the CEO between meetings.
Deputy Chair of the Board
If elected by the Board, the Deputy Chair acts
as a sounding board and provides support for the Chair. The Deputy Chair convenes Board meetings in accordance with the Companys Articles
of Association and leads the Board's work in the event the Chair is unavailable or is excused from a Board meeting. The Deputy Chair may
act as an intermediary in any conflicts among Board members or between the Chair and the CEO. The Board can designate additional roles
and responsibilities of the Deputy Chair.
Corporate Secretary
The Corporate Secretary is appointed by the Board
to ensure that Board members have the proper advice and resources for performing their duties. The Corporate Secretary is also responsible
for organizing and coordinating Board and committee meetings and ensuring that the minutes of those meetings reflect the proper exercising
of Board duties.
The Corporate Secretary is also a confidante and
resource to the Board and senior management, providing advice on Board responsibilities and logistics.
Chief Executive Officer (CEO)
The CEO leads the development and execution of
the Companys strategy with a view to creating shareholder value and enacting the Company's purpose. The CEO is responsible for day-to-day
activities and management decisions, both operating and financial. The CEO is a liaison between the Board and management and communicates
to the Board on behalf of management.
The CEO also leads Millicom's communications with
shareholders, employees, government authorities, other stakeholders and the public.
Board Membership, Balance and Independence
The Nomination Committee and the Board periodically
review the size, balance and diversity of the Board to determine whether any changes are appropriate.
At the AGM, held annually within six months of
the end of the financial year, or at any other general meeting, shareholders may vote for or against the Directors proposed by the Nomination
Committee. Shareholders that hold at least 5% of the share capital may propose additional Directors.
The Board has adopted the qualification guidelines
of an independent director as defined by the Swedish Code, and with consideration of the specific independence requirements within the
Nasdaq Stock Market rules. A Directors independence is determined by a general assessment of the Company or its executive management based
on the Board's independence criteria. The following graphic shows the Board members' independence as of December 31, 2023, Following the
tragic passing of Nicolas Jaeger, on February 26, 2024, Aude Durand, the Chair of Millicoms Nomination Committee, was elected as a member
of the Board of Millicom (who is independent from the Company and its executive management, but not from the major shareholder, Atlas
Luxco).
Factors considered to determine the
Directors independence (i) from the Company, executive management and (ii) the major shareholders
Category |
Test |
Managerial duties |
Is or has been the CEO of the Company or a closely related company within the past five years |
Employment |
Is or has been employed by the Company or a closely related company within the past three years |
Other services |
Receives a not-insignificant remuneration for advice or other services (beyond the remit of the Board position) from the Company, a closely related company or a person in the executive management of the Company |
Business relationship |
Has been in a significant business relationship or had other significant financial dealings with the Company or a closely related company within the past yearas a client, supplier or partner; either individually or as a member of the executive management team; or as a member of the Board or a major shareholder in a company with such a business relationship with the Company |
Audit function |
Is or has within the last three years been a partner at, or has, as an employee, participated in an audit of the Company conducted by the Companys or a closely related companys current or then auditor |
Cross directorships |
Is a member of the executive management of another company, if a member of the board of that company is a member of the executive management of the Company |
Family relationship |
Has a close family relationship with a person in the executive management of the Company, or with another person named in the points above, if that persons direct or indirect business with the Company is of such magnitude or significance as to justify the opinion that the Board member should not be considered independent |
|
YES to any of the above in relation to the Company or the management
of the Company:
=> Typically not independent from the Company or its executive
management |
Assessment |
YES to any of the above in relation to a major shareholder:
=> Typically not independent from a major shareholder |
Swedish Code's
independence provisions
Requirement |
Compliant |
The majority of Millicoms Board must be independent from the Company and its executive management team. |
8 out of 9 Millicom Directors meet this criterion (89%) |
At least two of those independent Directors must also be independent from the Companys major shareholders. |
6 out of 9 Millicom Directors meet this criterion (67%) |
The majority of the members of the Audit Committee are to be independent in relation to the Company and its executive management. At least one of the members who is independent in relation to the Company and its executive management is also to be independent in relation to the Companys major shareholders. |
All of Millicom's Audit and Compliance Committee members meet this criterion (100%) |
The Chair of the Board may chair the Compensation Committee. The other members of the committee are to be independent of the Company and its executive management. |
All of Millicom's Compensation and Talent Committee members meet this criterion (100%) |
Nasdaq Stock
Market rules
Requirement |
Compliant |
The Audit Committee must have at least three members, all of whom meet Nasdaq Stock Market and U.S. Securities and Exchange Commission definitions of independence. |
The four members of Millicom's Audit and Compliance Committee all meet this criterion (100%) |
Board
Profile: Skills and Experience
Mr. Mauricio Ramos
Executive Director, Interim Chair
Role: Re-elected as Executive Director
in May 2023 and elected as Interim Chair on August 31, 2023; first appointed as Executive Director in June 2020
Nationalities: U.S. and Colombian
citizen
Age: Born in 1968
Skills: Mr. Ramos brings his experience
as CEO of Millicom, a position he has held since April 2015. During his tenure, he has designed, proposed and implemented the present
strategy of the Millicom group, transforming the Company into a fixed internet and mobile business with a focus on Latin America. Under
Mr. Ramos leadership, Millicom solidified its company purpose to build the digital highways that connect people, improve lives and develop
communities and built a strong corporate culture described as Sangre Tigo.
Experience: Currently, Mr. Ramos
serves as: (i) a member of the Board of Directors of Charter Communications (U.S.); and (ii) Commissioner at the Broadband Commission
for Sustainable Development. Previously, Mr. Ramos served as President of Liberty Globals Latin American division, a position he held
from 2006 until February 2015. During his career at Liberty Global, Mr. Ramos held several leadership roles, including positions as Chairman
and CEO of VTR in Chile, Chief Financial Officer of Libertys Latin American division, and President of Liberty Puerto Rico.
Education: Lawyer and Economist,
Los Andes University
Independence: Not independent from
the Company and its executive management, independent of the Companys major shareholders
Millicom shareholding at January 31, 2024 (including
holdings by closely related persons): 459,948 shares
Ms. Pernille Erenbjerg
Deputy Chair, Non-Executive Director
Role: Re-elected as a Non-Executive
Director and Deputy Chair of the Board in May 2023; first appointed in January 2019
Nationality: Danish citizen
Age: Born in 1967
Skills: Ms. Erenbjerg brings years
of experience operating a converged provider of communication and entertainment services and driving transformational processes in complex
organizations, both organically and through M&A.
Millicom Committees: Chair of the
Compensation and Talent Committee
Experience: Currently, Ms. Erenbjerg
also serves as (i) Deputy Chair of Genmab, a dual listed company focusing on international biotechnology headquartered in Denmark; (ii)
a Non-Executive Board member of RTL Group, Europe's largest broadcaster; and . (iii) Chair of the Board of KK Wind Solutions A/S (a Danish
privately owned company providing various parts and solutions for the wind
industry). Previous roles include: (i) President and Group Chief Executive
Officer of TDC, the leading provider of integrated communications and entertainment solutions in Denmark and Norway; and (ii) Chief Financial
Officer and Executive Vice President of Corporate Finance at TDC, among others.
Education: MSc in Business Economics
and Auditing, Copenhagen Business School
Independence: Independent from
the Company, its executive management and its major shareholders
Millicom shareholding at January 31, 2024 (including
holdings by closely related persons): 41,404 shares
Ms. Maria Teresa Arnal
Non-Executive Director
Role:
First elected as a Non-Executive Director in May 2023
Nationality: Mexican, Venezuelan
and Spanish citizen
Age: Born in 1971
Skills: Ms. Arnal brings her significant
knowledge in the fields of digital payments and digital infrastructure businesses in Latin America, as well her experience in digital
and new media technology, telecommunications and entertainment.
Millicom Committees: Member of
the Compensation and Talent Committee
Experience: Ms. Arnal currently
serves as a director of (i) Walmart of Mexico and Central America, (ii) Sigma Alimentos, S.A. de C.V., wholly owned by Alfa Corporativo,
S.A. de C.V, a global food company headquartered and listed in Mexico, and (iii) Orbia, a purpose-driven growth company that tackles
global challenges. Her previous experience includes (i) managing director for Google Mexico, (ii) Managing Director Spanish Speaking
LATAM at Twitter, (iii) Chief Executive Officer and President at J. Walter Thompson Company in Mexico, (iv) General Manager, Director
of Operations, Director of Sales, and Alliances Microsoft in Mexico, (v) consultant for The Boston Consulting Group and Booz, Allen &
Hamilton. Furthermore, she founded Clarus, a leading digital marketing firm that was later acquired by WPP, and she has been involved
with the tech start-up ecosystem in Latam as an investor and through Endeavor and several VC funds.
Education: Bachelors degree in
Industrial Engineering from Andres Bello Catholic University (UCAB) and holds a Master of Business Administration (MBA) from Columbia
Business School.
Independence: Independent from
the Company, its executive management and its major shareholders
Millicom shareholding at January 31, 2024 (including
holdings by closely related persons): 5,601 shares
Mr. Bruce Churchill
Non-Executive Director
Role:
Re-elected as a Non-Executive Director in May 2023; first appointed in May 2021
Nationality: U.S. citizen
Age: Born in 1957
Skills:
Mr. Churchill brings over 30 years of operational and strategy experience in the media industry, including senior management roles
in Latin America.
Millicom Committees: Member of
the Audit and Compliance Committee and member of the Compensation and Talent Committee
Experience: Currently, Mr. Churchill
serves on the Board of Wyndham Hotels and Resorts, one of the largest hotel franchises in the world, where he also chairs the Compensation
Committee and as a member of the Audit Committee. Previously, he served as (i) Non-Executive Director on the Board of Computer Sciences
Corporation, a multinational corporation that provided IT services and professional services, from 2014 to 2017 (when the company merged
with HP Enterprise); (ii) President of DIRECTV Latin America, LLC, from 2004 to 2015, and Chief Financial Officer of DIRECTV from January
2004 to March 2005; and (iii) President and Chief Operating Officer of STAR TV.
Education: MBA, Harvard Business
School; Bachelor of Arts in American Studies, Stanford University
Independence: Independent from
the Company, its executive management and its major shareholders
Millicom shareholding at January 31, 2024 (including
holdings by closely related persons): 18,167 shares.
Ms. Aude Durand
Non-Executive Director
Role: Elected as a Non-Executive
Director of the Board in February 2024
Nationality: French citizen
Age: Born in 1992
Skills: Ms. Durand brings years
of experience in the telecommunications industry and know-how about
AI projects and cloud-based infrastructure.
Millicom Committees: None
Experience: Currently, Ms. Durand
is the Deputy CEO at iliad Holding, where she is involved in key projects across iliads telecom operators in France, Italy and Poland.
She also oversees iliads AI endeavors, including the creation of Kyutai, a world-class open-science AI lab. In addition to her role at
iliad Holding, Ms. Durand holds positions as Chair of Scaleway (leading European cloud provider, owned by iliad) and Board Member of
Monaco Telecom.
Education: Master of Science (MSc)
in Management Science & Engineering from Stanford University (USA) and an Engineering Degree from Ecole Polytechnique (France)
Independence: Independent from
the Company and its executive management, but not from the major shareholder (Atlas Luxco)
Millicom shareholding at January 31, 2024 (including
holdings by closely related persons): no shares
Mr. Tomas Eliasson
Non-Executive Director
Role: Elected as a Non-Executive
Director in May 2023; first appointed in May 2022
Nationalities: Swedish citizen
Age: Born in 1962
Skills: Mr. Eliasson brings to
the Millicom Board significant experience as a Chief Financial Officer (CFO) for multinational and global Swedish companies in roles
that span governance and oversight over financial reporting, internal control, and risk management processes and procedures within global
finance functions. He also brings extensive knowledge of Millicom, having served as a Non-Executive Director and Chair of the Audit Committee
for seven years between 2014 and 2021.
Millicom Committees: Chair of the
Audit and Compliance Committee
Experience: Currently, Mr. Eliasson
serves as: (i) Non-Executive Director of Riksbankens Jubileumsfond, a Swedish foundation promoting and supporting research in the humanities
and social sciences; (ii) Non-Executive Director of Boliden, a metals company with a focus on sustainable development, listed in Nasdaq
Stockholm; (iii) Non-Executive Director of Telia Company, a listed telecommunications, media and entertainment company; and (iv) Non-Executive
Director of Elekta AB a company providing precision radiation therapy solutions. Previously, Mr. Eliasson served as: (i) Chief Financial
Officer (CFO) of Sandvik AB, a global high-tech engineering group providing solutions for the manufacturing, mining and infrastructure
industries, until January 2022; (ii) CFO of Electrolux, a leading global appliance company listed in Nasdaq Stockholm; (iii) CFO of ASSA
ABLOY Group, a global leader in access solutions, listed in Nasdaq Stockholm; and (iv) CFO of SECO Tools, a global metal cutting and
machining solutions provider, among others.
Education: Bachelor of Science
in Business Administration and Economics, University of Uppsala
Independence: Independent from
the Company, its executive management and its major shareholders
Millicom shareholding at January 31, 2024 (including
holdings by closely related persons): 12,743 shares
Mr. Michael Golan
Non-Executive Director
Role: First elected as a Non-Executive
Director in May 2023
Nationality: Israeli citizen
Age: Born in 1978
Skills: Mr. Golan brings insights
from his experience as CEO in the telecommunications and media sectors and creating a mobile operator in Israel.
Millicom Committees: Member of
the Audit and Compliance Committee
Experience: Mr. Golan created Golan
Telecom in 2010 the 5th Israeli mobile operator at the time. Golan Telecom was sold in 2017. Before that, he joined the Iliad group as
Chief Operating Officer and soon became CEO of Iliad, a position he left in 2007.
Education: Mr. Golan is a graduate
of ESCP/EAP business school and Paris Dauphine University.
Independence: Independent from
the Company and its executive management, but not from the major shareholder (Atlas Luxco)
Millicom shareholding at January 31, 2024 (including
holdings by closely related persons): no shares
Mr. Thomas Reynaud
Non-Executive Director
Role: First elected as a Non-Executive
Director in May 2023
Nationality: French citizen
Age: Born in 1973
Skills: Mr.Reynaud brings extensive
experience in driving growth in the telecommunications and media sector and has advised several companies in these areas on their business
development and IPOs.
Millicom Committees: Member of
the Compensation and Talent Committee
Experience: Currently, Mr.
Reynaud serves as (i) Chief Executive Officer and a member of the Board of Directors of Iliad Group, the parent of Free in France,
Iliad in Italy and Play and UPC Polska in Poland; (ii) a Board member of the Mozaïk Foundation, an active supporter of the
ScholaVie association which campaigns for positive schooling; and (iii) a partner of several innovative ventures in the agrifood
sector. Mr. Reynaud joined Iliad in 2007, tasked with structuring the Groups growth. He first served as Head of Business Development
before becoming Chief Financial Officer in 2008 and then a Senior Vice-President in 2010. He has been the Groups Chief Executive
Officer since May 2018. Thomas began his career in New York in 1997. He then went on to become Managing Director in charge of the
Telecoms and Media sector at Société Générale, where he advised European companies on their business
development, and notably Iliad at the time of its IPO.
Education: Graduate of HEC business
school and New York University
Independence: Independent from
the Company and its executive management, but not from the major shareholder (Atlas Luxco)
Millicom shareholding at January 31, 2024 (including
holdings by closely related persons): 5,601 shares
Ms. Blanca Treviňo
Non-Executive Director
Role: First elected as a Non-Executive
Director in May 2023
Nationalities: Mexican and U.S.
citizen
Age: Born in 1962
Skills: Ms. Treviňo brings
her wide-ranging international experience in IT services in emerging countries, particularly in Latin America, as well as strong
leadership and perspectives in the rapidly evolving world of business technology.
Millicom Committees: Member of
the Audit and Compliance Committee
Experience: Ms. Treviňo is
the President, CEO, and co-founder of Softtek, a global company dedicated to helping organizations evolve through technology. She
also serves as (i) Co-Chair of the Partnership for Central America, an initiative supported by the Vice-President of the United
States, (ii) Vice-President of the Mexican Business Council, (iii) non-executive director at the Mexican Stock Exchange, (iv)
director at Altan Redes, a private company that is the designer, developer, and operator of the shared telecommunication networks
initiative in Mexico, and (v) member of the Advisory Council of the MIT School of Engineering, Previously she served as (ii)
director at Grupo Lala, (ii) director at the Americas Society, (iii) director at Council of the Americas, (iv) director at the
Ibero-American Council on Productivity and Competitiveness, and (v) independent director of Walmart Mexico for 15 years, as well as
an independent director of companies such as Goldcorp and the state-owned Federal Electricity Commission.
Education: Bachelors degree in
Computer Science from the Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM).
Independence: Independent from
the Company, its executive management and its major shareholders
Millicom shareholding at January 31, 2024 (including
holdings by closely related persons): 5,601 shares
Board
Program
Summary of Board Activities in 2023
Immediately after the 2023 AGM, the Board of Directors
held a meeting during which it agreed on key governance matters, the calendar and an annual program consisting of specific areas of focus
on which the Board has a role to oversee and advise the Company.
Specific projects and topics arise in the normal
course of business and are added to the program of the Board; some of these are handled by specific Board committees.
Board program and Area of Focus in 2023
Board annual program |
Focused actions |
1. Strategic review |
Discussed, reviewed and approved the strategy |
Oversaw and approved the recapitalization of the Colombia business |
Oversaw progress in carving out the MFS and Lati tower infrastructure businesses |
Discussed with the Executive Team industry and geographic trends and the operational and financial strategy for each country, with specific focus on Colombia and Guatemala |
2. Operating and financial performance review |
Discussed priorities and challenges for each of the operations, including development of MFS, cable and mobile data businesses, efficiency measures and capital expenditure allocation |
Monitored challenges, threats, opportunities and other consequences of the macroeconomic climate on the business and strategy |
Reviewed and approved spectrum acquisition, updated 2023 budget and discussed and approved the 2024 budget |
3. Corporate governance, legal and compliance matters |
Made revisions and updates to governance documents (Board and committee charters, procedural rules and instructions to the CEO as well as the authority matrix) |
Elected the Deputy Chair and Committee Chairs and members, and elected the Interim Chair of the Board |
4. ESG; sustainability and other external affairs related matters |
Oversaw initiatives in implementation of the ESG strategy and progress toward sustainability targets |
Reviewed the external affairs strategic framework and implementation activities |
Periodically reviewed the political situation by market, with a specific focus on election periods, international relations and advice on related risk management |
Reviewed regulatory and engagement challenges |
Reviewed climate-related risks and impact of the business on climate change |
5. Organizational structure and corporate culture |
Participated in performance reviews of the Executive Team and of the management, and changes in organizational and reporting structures |
Oversaw organizational and operational model changes |
Oversaw succession planning for the Executive Team |
Reviewed cultural initiatives, including DE&I developments |
6. External financial reporting and non-financial performance |
Held periodic meetings with the external auditors to review the financial position and reviewed and approved related reporting |
Reviewed the 2022 Annual Report and 20-F, including the 2022 Consolidated Financial Statements of the Company |
Reviewed quarterly earnings releases and 2023 interim consolidated financial statements |
Approved corporate finance strategy, including liability management initiatives to extend maturity and lower average cost of debt |
7. Risk management |
Participated in the annual risk reassessment and reviewed the key risks facing the Group and its approach to managing risks |
Set the risk appetite of the Group |
8. Capital structure and shareholder remuneration policy |
Approved refinancing of Group and local bonds and loans to extend maturity and lower average cost of debt |
Recommended the shareholder remuneration policy and approved the share repurchase plan; 282,724 shares were repurchased during 2023 |
9. Portfolio management, including acquisitions and divestments |
Discussed acquisition and disposal developments and opportunities with particular focus on carve-out and monetization of tower infrastructure assets |
10. Board performance self-evaluation |
Completed an annual self-evaluation of combined Board performance and individual performances and reported to the Nomination Committee |
11. HR matters |
Evaluated the performance and approved the compensation of the CEO |
Oversaw succession planning for the Executive Team |
12. Reports from committees |
Regularly reviewed reports from Audit and Compliance Committee, and Compensation and Talent Committee on recent activities |
Discussed Nomination Committee Director appointment proposals |
Induction and Training
Millicom provides incoming Board members with information
on their roles and responsibilities, the Board's operating procedures and Millicoms business and industry. We provide access to governance
documents, policies and procedures; meeting materials; and Company information through a secure online tool, in meetings set with the
Executive Team, and through ongoing dissemination of information.
Millicom provides training on topics such as anti-bribery
and corruption, ethics, independence and insider trading. In addition, the Board regularly receives detailed reports on specific areas
that support Directors' understanding of Millicoms business and operating environment.
In 2023 the Directors participated in a visit to
Millicoms operations in Guatemala to learn about the characteristics of the local market, see aspects of the business in operation, and
interact with local management.
Board Effectiveness
The Board conducts an annual performance review
process, wherein each Board members personal performance is also reviewed. This involves assessing Board and committee actions and activities
against the Boards mandate, as determined in the Board Charter, and the mandates of its various committees.
In 2023, the Board used a questionnaire to assess
its performance against the Board's key duties, its composition and processes, and the performance of individual Board members. The results
of the evaluation were presented to the Nomination Committee. In addition, the Nomination Committee continued the engagement with an international
consultancy firm to assist in an assessment of the composition of the Board, now and for the future.
Board Meetings/Attendance at Regularly Scheduled Meetings of the
Board in the 2023 Financial Year
Director |
Meeting Attendance |
% |
Mr. Mauricio Ramos |
10 of 10 |
100 |
Ms. Pernille Erenbjerg |
8 of 10 |
80 |
Ms. Maria Teresa Arnal |
6 of 6 |
100 |
Mr. Bruce Churchill |
10 of 10 |
100 |
Mr. Tomas Eliasson |
9 of 10 |
90 |
Mr. Michael Golan |
5 of 6 |
83 |
Mr. Nicolas Jaeger |
6 of 6 |
100 |
Mr. Thomas Reynaud |
5 of 6 |
83 |
Ms. Blanca Treviño Vega |
6 of 6 |
100 |
Attendance |
65 of 70 |
93 |
Former Director (until August 2023) |
|
|
Mr. José Antonio Ríos García |
8 of 8 |
100 |
Former Directors (until May 2023) |
|
|
Mr. Odilon Almeida |
4 of 4 |
100 |
Mr. Lars-Johan Jarnheimer |
4 of 4 |
100 |
Ms. Mercedes Johnson |
4 of 4 |
100 |
Mr. James Thompson |
4 of 4 |
100 |
Overall attendance |
89 of 94 |
95 |
Board Committees
The Board is supported by committees (Audit
and Compliance Committee and Compensation and Talent Committee) that work on behalf of the Board within their respective areas of
responsibility. From time to time, the Board delegates authority to an ad hoc work group so that it may resolve a specific matter on
its own without having to go before the full Board for approval.
I. Audit and Compliance Committee
Letter from the Chair of the Audit and Compliance Committee
I am pleased to present the Audit and Compliance
Committees report for 2023. We convened eight formal meetings during the financial year in order to satisfy our established set of responsibilities.
In a dynamic landscape marked by global economic
shifts, persistence of macroeconomic headwinds, and managements actions to position the company to drive an increase in annual equity
free cash flow generation, Millicom demonstrated resilience, achieving key milestones in 2023, paving the way for a strong 2024. These
developments alongside evolving technological advancements and new regulatory requirements, such as Environmental Social and Governance
(ESG) disclosures, cybersecurity, among otherspresented both opportunities and challenges that shaped the agenda of the Audit and Compliance
Committee throughout the year.
Compliance Related topics
In 2023, we continued to develop the ethics and
compliance program to better assist employees in doing the right thing the right way, including continuing to improve the program's reach.
As such, we continued enhancing our three strategic focus points: embed and entrench, communication, and data analytics. With compliance
integrated within the Company's business processes, compliance teams are better able to detect and mitigate any potential risks in real
time. Additionally, the compliance function disseminated its messages in conjunction with other departments in a clear and understandable
manner, with everyone in the organization apprised of both risks and controls that are in place. Similarly, we used data collected on
our platforms to develop action plans and attack root causes.
In focusing on the most pressing risks in 2023,
we continued reinforcing the main elements of our compliance program, including our annual training for the entire Company. The training
covered, among other topics, our Code of Conduct, our Speak Up campaign, our anti-corruption policy and our anti-money laundering (AML)
program.
The training campaign this year was designed and
prepared using in-house talent and resources. Employees across the Company participated in creating, producing and delivering a 100% Tigo-customized
course.
We continued to build and refine our ethics and
compliance program in 2023. This included our AML and Government Interactions policies. These revised policies aim to mitigate the current
risk landscape and adopt best practices across the board.
Audit Related topics
Supported by the guiding principles established
by management and periodic updates on the strength of the business, the Audit and Compliance Committee engaged in risk oversight of critical
areas like ESG, cybersecurity, supply chain challenges and other external threats. Further, our overarching objectives included ensuring
the integrity of the Groups financial reporting and that appropriate accounting judgments were made, assessing the external auditor's
effectiveness, and overseeing the status of the internal control environment.
Our Internal Audit Team assisted the committee
by harmonizing their plans and assurance activities with the evolving risk profile and prioritizing reviews to provide consulting services
where appropriate. These activities generated relevant recommendations aimed at enhancing the control posture of the company.
In addition to tracking important regulatory developments
in financial reporting, the committee monitored tax obligations, new debt issuance and refinancing activities, as well as the evolution
of Millicoms risk management programs.
I wish to extend my appreciation to my colleagues
for their support of and commitment to the activities of the committee. On behalf of the Board, I would like to reconfirm our commitment
to a culture of ethics and strong compliance that leads to success for the business and pride for our Company by making it happen the
right way.
I look forward to continue performing our duties
until the conclusion of our mandate at the 2024 AGM.
Mr. Tomas Eliasson
Chair of the Audit and Compliance Committee
Audit and Compliance Committee Members and Attendance at Regularly
Scheduled Meetings in 2023
Audit and Compliance Committee |
Position |
First appointment |
Meetings/attendance |
% |
Mr. Tomas Eliasson |
Chair* |
May 2022 |
8 of 8 |
100 |
Mr. Bruce Churchill |
Member |
May 2021 |
8 of 8 |
100 |
Mr. Michael Golan |
Member |
May 2023 |
3 of 4 |
75 |
Ms. Blanca Treviño Vega |
Member |
May 2023 |
4 of 4 |
100 |
Attendance |
|
|
23 of 24 |
96 |
Ms. Mercedes Johnson |
Former Chair of the Audit Committee and former Member of the Compliance and Business Conduct Committee |
May 2019 (until May 2023) |
4 of 4 |
100 |
Mr. James Thompson |
Former Member of the Audit Committee |
January 2019 (until May 2023) |
3 of 3 |
100 |
Mr. Odilon Almeida |
Former Chair of the Compliance and Business Conduct Committee |
November 2015 (until May 2023) |
1 of 1 |
100 |
Overall attendance |
31 of 32 |
97 |
*Designated as having specific accounting competence as per the EU
Directive.
In addition, the Interim Chair of the Board,
Mr Mauricio Ramos (as from 31 August, 2023) and the former chair of the Board, Mr. José Antonio Ríos García (until 31 August, 2023),
attended all of the Audit and Compliance Committee meetings.
Appointment and Role of the Audit and Compliance Committee
Millicom's Directors have established an Audit
and Compliance Committee that convenes at least four times a year and comprises a minimum of two directors. The Audit and Compliance Committee
is composed solely of Non-Executive Directors, all of whom were independent Directors in 2023. Members are appointed to ensure there is
a mixture of relevant experience in both finance and broader commercial matters. The Board is confident that the collective experience
of the members enables them to act as an effective Audit and Compliance Committee. The Audit and Compliance Committee is also satisfied
that it has the expertise and resources available to fulfill its responsibilities.
This committee has responsibility to assist the
Board in its responsibility for the robustness, integrity and effectiveness of financial reporting, risk management, internal controls,
cybersecurity program, internal audit and external audit process, as well as compliance with related laws and regulations; and to oversee
the Companys compliance program, standards of business conduct and related investigations, and to monitor the Companys actions and resources
in these areas. Millicoms Audit and Compliance Committee reports on and makes recommendations to the full Board regarding the Groups compliance
programs and standards of business conduct. The ultimate responsibility for reviewing and
approving Millicoms Annual Report and accounts remains with the Board.
The Chief
Executive Officer, Chief Financial Officer, Chief Accounting Officer, VP Risk Management & Internal Audit, Head of Business Controls,
Chief Legal and Compliance Officer, Chief Commercial & Technology Officer, Chief Information Security Officer, Chief External Affairs
Officer and representatives from the Company's external auditor EY are invited to attend committee meetings. The Secretary of the committee
is the Group's Company Secretary. The Audit and Compliance Committee Chair prepares the meeting agenda in conjunction with the Chief Financial
Officer and Chief Legal and Compliance Officer. Regular private sessions are held, attended only by Audit and Compliance Committee members
and the external auditor, to provide an opportunity for open dialogue without management present. The CEO and Executive Team are committed
to our Sangre Tigo culture and are actively involved in fostering a culture of ethics and compliance from the top across all our lines
of business.
At each regularly
scheduled meeting, the Audit and Compliance Committee receives reports from the Chief Financial Officer, the external auditor, and the
heads of Risk Management & Internal Audit and Business Controls. Additional reports are submitted by other officers of the Company
as required. The Audit and Compliance Committee received the required information from the external auditor in accordance with Luxembourg
regulations.
Summary of Areas of Focus and Actions in 2023
Financial reporting
(refer to the following pages for details)
|
Reviewed key accounting and reporting matters at each meeting. |
Reviewed and approved each quarters earnings release and the 2023 annual earnings release; the Annual Report and 20-F together with the consolidated financial statements; the 2023 half-year earnings release; and each quarter's interim financial statements. |
Reviewed the latest accounting developments and their effect on the financial statements.. |
Reviewed the alternative performance measures policy. |
External auditor
(refer to the following pages for details) |
Received reports from the external auditor at each meeting in compliance with EU regulations covering important financial reporting, accounting and audit matters; including updates on SEC and CSSF guidelines. |
Approved the 2023 external audit strategy and fees and the proposed approach to address the challenges posed by external factors (such as economic pressures, cybersecurity threats, among others) and internal factors (such as the Everest project). |
Considered the results of control testing performed by the external auditor in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 |
Reviewed the performance of the external auditor and its independence, including the revision and approval of all audit, audit-related and non-audit services rendered by the external auditors. |
Risk Management & Internal Audit activities
(Refer to the following pages for details)
|
Provided guidance and oversight over risk management processes |
Reviewed alignment of top risks with strategy and recommended risk appetite |
Reviewed regular risk reports and risk management remediation plans |
Approved the annual Internal Audit plan and subsequent updates to the plan |
Reviewed internal audit findings arising from the delivery of the 2023 audit plan |
Business controls and SOX
(Refer to the following pages for details) |
Reviewed the results of Millicoms Sarbanes-Oxley program. |
Received and reviewed findings and recommendations regarding the design and operating effectiveness of internal controls over financial reporting based on the cycle of management testing of internal controls |
Governance |
Reviewed and approved the Internal Audit Charter and Enterprise Risk Management Charter. |
ESG reporting |
Reviewed the 2022 EU Taxonomy report, the progress on the effective CSRD legislation (that would become applicable for Millicom for financial year 2024) and upcoming SEC climate-disclosure proposed rules. |
Financing, treasury and tax |
Reviewed the Groups tax strategy and structure and approved the tax policy |
Approved the updated Group treasury and related policies, including policies on hedging and financial risk management |
Fraud management |
Reviewed fraud-related cases, investigations and remedial actions |
Revenue assurance |
Received updates on revenue assurance activities |
Reviewed trends and actions taken to minimize loss and revenue leakage |
Related party transactions |
Reviewed related party transactions |
Compliance program elements reviewed |
Monitored anti-corruption program and automated procedures, including those covering new and emerging areas of risk and strengthening of the overall program. |
Published revised compliance policies and procedures and communicated them to the whole organization. |
Reviewed training completion rates on Company compliance policies as part of select managers' KPIs. |
Incorporated compliance factors into executives incentive programs for the sixth consecutive year; bonus awards are tied to achievement of compliance KPIs. Code of Conduct training is a requisite to access bonus in the whole organization. |
Reporting and investigations |
Supported Speak Up program by receiving updates on the use of Speak Up resources to report issues of perceived non-compliance with our policies and values |
Global anti-money laundering (AML) program |
Reviewed the implementation of the in-house transaction monitoring tool in Paraguay, Guatemala and Panama. |
Approved the group-level AML training proposed by the Corporate Compliance Department |
Supported on-site AML reviews to all MFS and Telco operations, except Bolivia and Colombia. |
Information security and cybersecurity |
Reviewed the Information Security Framework, organization and governance |
Reviewed the Information Security Program, including risk management, vulnerability management, and awareness and training, among others |
Reviewed reports on cybersecurity incidents, including impact, responses and remediation |
Reviewed maturity improvement plans related to the NIST Cyber Security Framework (CSF) implementation |
The Audit and Compliance Committee held eight meetings
during 2023, including five meetings coinciding with key dates in Millicoms external reporting calendar.
Financial reporting
The Audit and Compliance Committee reviewed earnings
releases and financial statements for each quarter. Comprehensive reports from management and the external auditors highlighted the significant
judgmental accounting issues for the attention of the committee. Reporting and disclosure topics under both EU and U.S. listing requirements
were addressed. To assist with all matters related to earnings releases, financial statements and other market disclosures, Millicom has
a Management Disclosure Committee composed of senior management from Finance, Legal, Compliance, Communications, Investor Relations and
other functions as and when required. The Disclosure Committee identifies and considers disclosure matters in market releases, including
releases that may contain material financial information.
External
Auditor
Effectiveness
The quality and effectiveness of the external audit
matter greatly to the Audit and Compliance Committee. A detailed audit plan outlining the key risks and proposed geographical coverage
is prepared and discussed with the Audit and Compliance Committee at the start of each annual audit cycle. The committee assessed audit
quality by referring to the standard of the reports received, the caliber of senior members of the audit team and the depth of inquiry
and discussions with executive management, in addition to management feedback provided to the Audit and Compliance Committee. This feedback
allows the committee to monitor and assess the performance of the external auditor as part of a recommendation to the Board regarding
the auditor's appointment.
Independence
The Audit and Compliance Committee has policies
to maintain the independence of the external auditor and to govern the provision of audit and non-audit services. The policies and approval
process of non-audit services and audit-related services comply with SEC independence rules and with the latest EU and local regulations.
Under these rules, the Audit and Compliance Committee pre-approves a list of services that can be rendered by the audit firm. If services
to be rendered are pre-approved in nature, management can approve them when requested (following an established authority matrix) and
present them to the Audit and Compliance Committee on a quarterly basis for formal approval. If services to be rendered are not pre-approved,
they should be pre-approved by the Chair of the Audit and Compliance Committee when requested and then submitted to the next full Audit
and Compliance Committee for formal approval. A schedule of all non-audit services with the external auditor is reviewed at each meeting.
For the year ended December 31, 2023, the Audit
and Compliance Committee approved fees for audit and audit-related services of $6.4 million, together with fees for non-audit work of
$0.5 million.
In compliance with independence rules, the previous
audit partner rotated off the audit in 2019 and the current audit partner will rotate off after the audit of the consolidated financial
statements as of December 31, 2023.
Risk Management and Internal Audit
Risk Management
The Audit and Compliance Committee received regular
reports on the Groups risk management framework and process from the Management Risk Committee, as well as reports on the evolution of
significant risks at both operational and Group levels and related mitigation and risk management actions. Further information is set
out in the Risk Management section of this Annual Report, starting on page 41.
In addition, the Audit and Compliance Committee
reviewed financial risk, tax risks, policy and strategy, treasury policy and risks, and Group insurance coverage.
Internal Audit
The Internal Audit team provides independent and
objective assurance, and consulting services over the design and effectiveness of Millicoms internal control environment, governance,
and risk management processes. The Internal Audit team employs a robust methodology that supports the systematic execution of internal
audit activities reflected through a risk-based annual Internal Audit Plan.
The annual Internal Audit Plan is developed in
alignment with the strategic risks of Millicom as well as consideration of the companys strategic priorities, input from senior management,
external audit findings, industry-relevant developments, and Internal Audits knowledge of the business. Before the start of the fiscal
year, the Audit and Compliance Committee approves the annual Internal Audit plan, which includes assurance and advisory projects and other
risk assessment initiatives, and assesses the adequacy of the budget and resources.
Execution of the 2023 Internal Audit Plan provided
the Executive Management Team and the Audit and Compliance Committee with an independent view of the effectiveness of Millicoms internal
control environment and governance processes in operational, financial, compliance, and technology areas. At each meeting, the Audit and
Compliance Committee received a report on internal audit activities, progress against the plan, updates to the plan, and results of the
audits completed in the period, including associated recommendations and management action plans where findings were identified.
Internal Controls and SOX
The Audit and Compliance Committee received the
results of management's testing of key controls and testing by the external auditors. Management concluded that the Group had maintained
effective internal controls over financial reporting.
A debrief of the Sarbanes-Oxley status program
was held. The Committee also reviewed and approved the planned scope of the 2023 program and approach to testing of key controls.
The Committee reviewed regular reports on the results
of management testing of key controls and the progress made to address any control gaps.
II. Compensation and Talent Committee
Letter from the Chair of the Compensation and Talent Committee
I
am pleased to present the 2023 Remuneration Report. The key remuneration highlights for the year are summarized below. Further details
are provided in the "Compensation
and
Talent
Committee's
Report".
The Committee
meets regularly to review executive compensation and other Human Resources related matters to ensure competitiveness across our markets.
We believe in paying for performance, which encompasses both short-term and long-term incentives. Talent constitutes a fundamental cornerstone
for our company. Therefore, we deem it imperative to integrate talent management considerations within the scope of the Compensation Committee.
With this enhancement, we formally renamed the committee to Compensation and Talent Committee.
Consequently,
as of September 2023, the committee, previously comprised of three Board of Directors members, expanded to encompass five members, dedicated
to addressing both Talent and Compensation matters: Ms. Pernille Erenbjerg (Chair), Ms. Maria Teresa Arnal, Mr. Bruce Churchill, Mr. Thomas
Reynaud and the late Mr. Nicolas Jaeger.
On August 31, 2023, Mauricio Ramos,
our CEO, was appointed interim Chair of the Board. To drive profitable growth within the company, with a focused approach on leading all
operational and financial responsibilities, the role of President/COO has been created. Maxime Lombardini was appointed to take on this
role, and with his background, experience, and proven track record, he has been instrumental in achieving the stated objectives.
In the face of high inflation rates,
escalating debt service costs, and elevated competition in our markets, it had become imperative to further enhance our efficiency program,
Project Everest. The efficiencies afforded by Everest enhance our ability to continue investing in the business and to secure access to
capital, enabling us to sustain our deeply held purpose: to build digital highways that connect our people and foster the development
of our communities. It is within this context that, in the year 2023, two waves of a corporate-level restructuring plan were implemented,
from March to December.
Our 2023 remuneration policy focused
on a total compensation approach which consists of:
a) a base salary, various benefits and pension arrangements;
b) a high variable component through an annual short-term
incentive (STI) bonus;
c) for senior management only, a portion (30-40%) of
this bonus is paid in cash, while the remaining portion is made as an equity grant from the deferred share plan (DSP), with vesting over
3 years 30%/30%/40%); and,
d) for top executives only, a long-term incentive plan
(LTI) that consists of an equity grant from the performance share plan (PSP).
The committee believes this blended
approach balances both short-term and long-term focus. Specifically for the Chief Executive Officer (CEO) and Executive Vice Presidents
(EVPs), the majority of their total compensation is variable, with a high proportion paid in shares. This aligns management and shareholder
interests by measuring performance, payment in shares and extended time horizons for vesting.
A substantial part of the annual
bonus (STI) for the top roles of the organization, including the CEO and EVPs is paid in shares that vest prorated over three years (DSP).
In addition the long-term incentive awards under the Performance Share Plan (PSP) cliff vest after three years and are fully paid in shares.
For our STI, 60%
of the 2023 bonus was based on performance against three financial targets: Service revenue, EBITDA and Operating free cash flow after
leases (OFCFaL). Of the remaining 40%, 10% was allocated to customer satisfactionmeasured using Relational Net Promoter Score (rNPS)and
30% was based on individual strategic objectives.
For the Long-Term Incentive component,
in 2023, we introduced an ESG metric in addition to Service Revenue, Operating free cash flow after Leases (OFCFaL) and relative Total
Shareholder Return.
We also encourage our top leaders
to take a longer-term view on positive business performance in alignment with Company and shareholder interests. Therefore, we have minimum
share ownership requirements for the CEO, EVPs, VP's and GM's that constitute our top executive team. The CEO is required to build and
maintain a shareholding with a value of at least 400% of base salary, a level he maintained and exceeded in 2023.
During the 2023 AGM, we received
ample support for our remuneration approach: 92.28% Approval for Remuneration Policy, 91.01% Approval for share-based incentive plans
and 99.47% Approval for Remuneration Report.
On
December 1, 2023, the Board adopted a full comprehensive "claw-back" policy in response to specific rules issued by the
SEC under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank). This policy ensures that
if our financial statements are restated due to errors, misstatements, or misconduct, we have mechanisms in place to recoup excess compensation
paid to current and former executive officers. By aligning with regulatory requirements and industry best practices, we reinforce responsible
governance and shareholder value.
There were no deviations to the
remuneration policy and the Board is confident that the policy has operated as intended over the year. A summary of the elements of executive
pay for 2023 is set out on the following pages.
The Compensation and Talent Committee
is committed to ongoing consultation with shareholders and their advisory groups.
On behalf of the Board, I hope
you find the 2023 Remuneration Report informative.
Ms. Pernille Erenbjerg
Chair of the Compensation and Talent Committee
Compensation and Talent Committees Report
This Annual Report describes the remuneration philosophyand
related policy and guidelinesas well as the governance structures and processes in place. It also sets out the remuneration of Directors,
as well as compensation of global senior management for the current and prior financial reporting years.
1.1 Role
of the Compensation and Talent Committee
The Compensation and Talent
Committee monitors and evaluates (i) programs for variable remuneration to senior management, including both ongoing programs and those
that have ended during the year; (ii) the application of the guidelines for remuneration to the Board and senior management established
at the shareholders' meeting; and (iii) the current remuneration structures and levels in the Company. The Compensation and Talent Committee
makes recommendations to the Board regarding the compensation of the CEO and his direct reports; approves all equity plans and grants;
and manages Executive Team succession planning. Final approval of the CEO remuneration requires Board approval.
The evaluation of the CEO
is conducted by the Compensation and Talent Committee and together with meeting the financial targets discussed below, in his STI payout,
the CEO received $1,249,386 in cash and $3,310,873 granted in deferred shares that vest over
three years for the Group's 2023 performance. The Chair of the Compensation and Talent Committee conveyed the results of the review and
evaluation to the CEO.
1.2 Compensation
and Talent Committee Charter
The Groups Compensation and
Talent Committee Charter can be found on our website under the Board Committees section and covers overall purpose/objectives, committee
membership, committee authority and responsibility, and the committees performance evaluation.
1.3 Compensation and Talent Committee Membership and Attendance 2023
Director |
Position |
First Appointment |
Meeting Attendance |
% |
Ms. Pernille Erenbjerg |
Chair |
January 2019 |
3 of 3 |
100 |
Ms. Maria Teresa Arnal |
Member |
May 2023 |
2 of 2 |
100 |
Mr. Bruce Churchill |
Member |
May 2023 |
2 of 2 |
100 |
Mr. Nicolas Jaeger |
Member |
May 2023 |
2 of 2 |
100 |
Mr. Thomas Reynaud |
Member |
May 2023 |
2 of 2 |
100 |
Attendance |
|
|
11 of 11 |
100 |
Former members |
|
|
|
|
Mr. Lars-Johan Jarnheimer |
|
|
1 of 1 |
100 |
Mr. James Thompson |
|
|
1 of 1 |
100 |
Overall Attendance |
|
|
13 of 13 |
100 |
1.4 Areas Covered in 2023
|
|
|
|
|
|
Topic |
Commentary |
Bonus (STI) and performance reports |
Reviewed and approved the Global Senior Management Team's 2022 performance reports and individual Executive Team payouts for STI/LTI (cash/equity) |
Reviewed and approved 2023 short-term variable compensation targets. |
Compensation review |
Approved all payments for CEO and Executive Team members. |
Reviewed executive remuneration and governance trends and developments. |
Reviewed and approved the peer group for the CEO and the Executive Team benchmarking. |
Approved changes to CEO and Executive Team compensation elements based on market competitiveness. |
Share-based incentive plans |
Approved the 2020 LTI (PSP) vesting. |
Reviewed and approved all equity grants. |
Reviewed and approved the 2023 share units plan (DSP and PSP) rules. |
Reviewed and approved the 2023 long-term variable compensation targets. |
Reviewed the replenishment of the treasury share balance reserved for share-based incentive plans. |
Reviewed share ownership guidelines and the compliance of each covered employee. |
Reviewed performance and projections of outstanding LTI plans (2021, 2022 and 2023). |
Reviewed equity plans participant turnover. |
Global reward strategy and executive remuneration review |
Reviewed remuneration/C&B philosophy and strategy. |
Variable pay design |
Discussed and approved STI and LTI design for 2023. |
Reviewed and approved the achievement of the MSU 2023 Tranche |
Reviewed and approved STI and LTI performance measures for 2023. |
Other |
Reviewed and approved exceptional items, new hire equity grants, etc. |
Reviewed Executive Teams severance payouts in a change of control. |
Reviewed and approved the Remuneration Clawback policy. |
Reviewed and discussed results of 2023 "Say on Pay." |
Compensation and Talent Committee governance |
Reviewed and approved the Compensation and Talent Committee annual meeting cycle and calendar. |
Reviewed the Compensation and Talent Committee Charter. |
Reviewed and approved the use of an external compensation consultant. |
2. Our Compensation Philosophy and Core Principles
The philosophy, guidelines, objectives, and policy
applicable to remuneration of the Global Senior Management Team were approved by the shareholders (item 23) of the AGM held on May 31,
2023.
2.1 Core Principles
The Compensation
and Talent Committee worked using the following objectives for the Global Senior Management Team's compensation.
What we strive for |
What it means |
Competitive and fair |
Levels of pay and benefits to attract and retain the right people. |
Drive the right behaviors |
Reward policy and practices that drive behaviors supporting our Company strategy and business objectives. |
Shareholder alignment |
Variable compensation plans that support a culture of entrepreneurship and performance, and incorporate both short-term and longer-term financial and operational metrics strongly correlated to the creation of shareholder wealth. Long-term incentives are designed to maintain sustained commitment and ensure the interests of our Global Senior Management Team are aligned with those of our shareholders. |
Pay for performance |
Total reward structured around pay in line with performance, providing the opportunity to reward strong corporate and individual performance. A significant proportion of top management's compensation is variable (at risk) and based on measures of personal and Company performance directly attributable to short-term and longer-term value creation. |
Transparency |
Millicom is committed to expanding external transparency, including disclosure around pay for performance, links to value creation etc. We leverage the use of data from our HR information systems to facilitate measurement and internal communications related to incentive composition including performance metrics, pay equity, goal setting, and pay-for-performance relationships. |
Market competitive and representative remuneration |
Compensation is designed to be market competitive and representative of the seniority and importance of roles, responsibilities and geographical locations of individuals (with the majority of the Global Senior Management Team roles located in the U.S. |
Retention of key talent |
Variable compensation plans include a significant portion of share based compensation, the payout of which is conditional on future employment with the Company for three-year rolling periods, starting on the grant date. |
Executive management to be "invested" |
The Global Senior Management Team, through Millicoms share ownership guidelines, is required to reach and maintain a significant level of personal ownership of Millicom shares. |
To drive the right behaviors and ensure expectations
are aligned, we communicate clearly to our employees what we do and do not do when it comes to compensation. A summary is set out in the
table below:
What we do |
What we don't do |
Align pay and performance. |
Create special executive perquisites. |
Designate a substantial majority of executive pay as at risk, based on a mix of absolute and relative financial and share price performance metrics. |
Permit executives to hedge company shares. |
Impose limits on maximum incentive payouts. |
Provide dividends or dividend equivalents on unearned PSUs or RSUs. |
Engage in a rigorous target-setting process for incentive metrics. |
Offer tax gross-ups related to change in control. |
Set our STI threshold to pay only at 95% and higher levels of achievement. |
Permit executives to use company shares as collateral |
Maintain robust share ownership guidelines for our top 30 executives. |
|
Provide double-trigger change in control provisions in equity awards. |
|
Maintain clawback policies that apply to our performance-based incentive plans. |
|
Retain an independent compensation consultant |
|
2.2 Elements of Executive Pay
Compensation for the Global Senior Management Team
in 2023 comprised a base salary, a short-term incentive (STI) plan and a long-term incentive (LTI) plan, together with pension contributions
and other benefits (e.g. healthcare).
Salary
Pay element |
Purpose |
Maximum opportunity |
Purpose and link to strategy |
Designed to be market competitive to attract and retain talent |
No absolute maximum has been set for Executive Team salaries. The committee considers increases on a case-by-case basis based on peer comparison. Pay increases usually reflect a combination of roles and responsibilities, local market conditions and individual performance. |
Operational execution |
Paid monthly in cash in U.S. dollars or the home currency of the executive |
The Compensation and Talent Committee aims to set salaries for the Executive Team at the median of the peer group. |
STI
Pay element |
Purpose |
Payout opportunity |
Purpose and link to strategy |
The STI links reward to key business targets (70%) and individual contribution (30%). |
With less than 95% achievement of business targets the award falls to 0%. The threshold achievement is 95% of the target, resulting in a payout of 80%. The opportunity is 200% for the achievement of 104% for service revenue, 106% for EBITDA, 107% for OFCFaL and 110% for rNPS. |
The STI aligns with shareholders interests through the provision of a portion of the payment delivered in share units deferred over three years (DSP) for the senior leadership team. The DSP is awarded upon achieving the performance targets, with 30% paid after one year, 30% after the second year and 40% after the third year of the grant date. |
The target achievement for:
CEO 365% (72% paid in DSP)
CFO 210% (64% paid in DSP) |
These plans help incentivize and motivate leadership to execute strategic plans in operational decision-making and achieve short-term performance goals, impacting Company performance and enhancing its value. |
Maximum achievement:
CEO 730% (144% paid in DSP)
CFO 420% (128% paid in DSP) |
The financial and operational targets are; |
|
Service revenue |
20% |
EBITDA |
20% |
Operating free cash flow after leases (OFCFaL) |
20% |
Relational Net Promoter Score (rNPS) |
10% |
Personal performance |
30% |
Benchmarking |
Our STI is a key component of the Millicom Group culture. We benchmark to peer companies within the U.S. and Latin America |
Each year the Compensation and Talent Committee determines the annual STI opportunity for the Executive Team. |
LTI
Pay element |
Purpose |
Payout opportunity |
Purpose and link to strategy |
The LTI links an important part of overall Global Senior Management Team compensation with the interests of our shareholders |
For financial metrics, achieving less than 80% of the target results in a payout of 0%. In the event the Company achieves between 80% and 120% of the target, the corresponding portion of the grant will be adjusted in linear pro rata of the achievement, starting at a payout of 0% at an achievement of 80% up to a maximum value of 200% if the target achievement is 120% or higher. For total shareholder return ("TSR"), no award is granted for performance below the peer group median. If the Company achieves a TSR performance at the median or above of a pre-determined peer, the grant will be adjusted in linear pro rata of the achievement starting at a payout of 100% up to a maximum value of 200% for a target achievement of 120% or higher. |
This plan aligns the Global Senior Management Team's longer-term incentives with the longer-term interests of shareholders, encouraging long-term value creation and retention. |
|
Millicom emphasizes a one-team mentality by maintaining unified goals and objectives in the long-term incentive program for the Global Senior Management Team, with the purpose of driving the successful achievement of three-year performance goals designed to enhance long-term value of the Company. |
|
Operational execution |
The LTI is a performance-based share units plan (PSP) whereby awarded share units fully vest at the end of a three-year period, subject to achievement against performance measures and fulfillment of conditions. |
The target achievement for:
CEO - 315%
CFO - 115% |
LTI payouts are typically in shares and based on company three-year cash flow and revenue targets approved by the Compensation and Talent Committee and the Board, in addition to shareholder return. |
Performance share units plan (PSP) |
The maximum achievement for:
CEO 630%
CFO 230% |
The weights for the PSP component are:
Service revenue: 30%
OCFaL (operating cash flow after leases): 50%*
Relative TSR: 10%
ESG: 10%. The five key ESG metrics that
will be used to measure progress are:
1. Female % of Total Employees ; 2. Female % of Leadership; 3. Progress
toward established SBTi targets; 4. Women and girls trained as part of our Conectadas Program; 5. Teachers trained as part of our Maestr@sConectad@s
program.
The PSP component pays out/is settled in shares at the end of three
years. |
|
*Since the 2021 LTI, we use OCFaL (operating cash flow after leases) in lieu of OFCFaL (operating free cash flow after leases) |
|
Benchmarking |
Our LTI is a key component of the Millicom Group culture. |
Each year the Compensation and Talent Committee determines the annual LTI opportunity for the Executive Team. |
For executives we benchmark to peer companies within the U.S. |
In addition, the Board uses
retention schemes to ensure continued retention of key individuals during periods of uncertainty.
2.3 Other Employment Terms and Conditions
Notice of termination: If
the employment of a member of Millicoms Executive Team is terminated, a notice period of up to 12 months potentially applies. The Board
regularly reviews best practices in executive compensation and governance and revises policies and practices when appropriate. Millicom's
change-in-control agreements for eligible executives include "double-trigger" provisions, which require an involuntary termination
(in addition to change in control) for accelerated vesting of awards.
Deviations from the policy and guidelines: In special
circumstances, the Board may deviate from the above policy and guidelines; for example, providing additional variable remuneration in
the case of exceptional performance.
2.4 Other Executive Compensation Policies
On December 1, 2023, Millicom adopted a compensation
recoupment policy, which is included as Exhibit 97.1 to this Annual Report. The policy provides for the recoupment of certain executive
compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements.
In addition, the Companys insider trading policy
prohibits any hedging or speculative transactions in the Companys shares, including the use of options and other derivatives. It also
prohibits directors and employees from selling the Companys stock short.
3.1 Key Elements of 2023 CEO and CFO Pay
In 2023, the key elements of the CEO and CFO compensation, in line with
the remuneration policy, were as follows:
|
Salary (USD) * |
Short-Term Incentive |
Long-Term Incentive |
Pension |
Benefits |
Mauricio Ramos (CEO) |
$1,224,863 |
STI Target |
100% in Cash Bonus |
PSP award of 315% of salary with 3-year cliff vesting (based entirely on performance shares) |
15% of salary |
Private healthcare |
265% in Share Units over 3 years vesting 30%/30%/40% |
Life insurance |
Performance Measures: |
60% Financial |
Car Allowance |
10% Customer |
|
30% Personal |
|
Sheldon Bruha (CFO) |
$650,000 |
STI Target |
75% in Cash Bonus |
PSP award of 115% of salary with 3-year cliff vesting (based entirely on performance shares) |
15% of salary |
Private healthcare |
135% in Share Units over 3 years vesting 30%/30%/40% |
Life insurance |
Performance Measures: |
60% Financial |
Car Allowance |
10% Customer |
|
30% Personal |
|
3.2 Summary of Total CEO/CFO Compensation
The compensation for the CEO and CFO is summarized
in the table below:
|
Mauricio Ramos (CEO) |
Sheldon Bruha (CFO) (i) |
Tim Pennington (Former CFO) (ii) |
In USD |
2023 |
2022 |
2023 |
2022 |
2022 |
Base Salary |
1,224,863 |
|
1,215,944 |
|
643,750 |
|
598,121 |
|
581,272 |
|
Fringe Benefits (iii) |
87,667 |
|
81,745 |
|
139,865 |
|
67,264 |
|
39,769 |
|
Pension Expense |
293,473 |
|
286,846 |
|
173,373 |
|
144,460 |
|
87,191 |
|
Total Fixed |
1,606,003 |
|
1,584,535 |
|
956,989 |
|
809,845 |
|
708,232 |
|
Annual Bonus (iv) |
1,249,386 |
|
1,650,460 |
|
492,544 |
|
541,075 |
|
|
|
Deferred Share Units (iv) |
3,310,873 |
|
4,373,719 |
|
886,580 |
|
973,935 |
|
|
|
LTIP (v) |
3,858,313 |
|
3,745,939 |
|
718,748 |
|
718,750 |
|
|
|
Total Annual Variable |
8,418,572 |
|
9,770,118 |
|
2,097,872 |
|
2,233,760 |
|
|
|
Annual Compensation |
10,024,575 |
|
11,354,653 |
|
3,054,861 |
|
3,043,605 |
|
708,232 |
|
MSU Plan (vi) |
481,860 |
|
|
|
|
|
|
|
|
|
Total Compensation |
10,506,435 |
|
11,354,653 |
|
3,054,861 |
|
3,043,605 |
|
708,232 |
|
Termination Benefits (ii) |
|
|
|
|
|
|
|
|
876,939 |
|
% Annual Fixed |
16.02 |
% |
13.95 |
% |
31.33 |
% |
26.61 |
% |
100.00 |
% |
% Annual Variable |
83.98 |
% |
86.05 |
% |
68.67 |
% |
73.39 |
% |
|
% |
(i) Mr. Bruha
(CFO) started January 12, 2022, and took over the CFO role effective April 1, 2022.
(ii) Mr. Pennington
compensation has been paid in GBP and for the purposes of this Annual Report converted to USD using December 31, 2022 Closing exchange
rate. Mr. Pennington started his 1-year notice period on April 1, 2022 and paid via payroll until November 30, 2022 and the remaining
4-month period paid as a one-time payment on December 22, 2022.
(iii) Fringe Benefits
include car allowance, life and disability insurance, medical and dental Insurance and relocation expenses.
(iv) The STI includes
cash bonus and the corresponding grant of deferred share units.
(v) LTIP is performance
share units granted in 2023 and 2022. Calculated based on the average Millicom closing share price on the US Nasdaq for the three-month
period ending December 31, 2023 and December 31, 2022.
(vi) MSU plan: Our stock-based MSU
performance plan is settled in cash. For the MSU description, see note B.4.1. to our audited consolidated financial statements included
elsewhere in this Annual Report.
CEO Compensation - Reported and Realized Pay Supplemental Tables:
The compensation for the CEO
and CFO is heavily weighted to variable compensation in the form of share units vesting over a three-year period. As a result, total reported
compensation may differ significantly relative to the actual realized compensation in any given year.
Reported Supplemental Table
|
Mauricio Ramos (CEO) |
In USD |
2023 |
2022 |
Base pay (i) |
1,224,863 |
1,224,863 |
STI - Bonus (ii) |
1,249,386 |
1,650,460 |
Share Awards (iii) |
7,169,186 |
8,119,658 |
MSU Target Awards |
|
4,000,000 |
Other Compensation (iv) |
87,667 |
81,745 |
Total Reported Pay
|
9,731,102 |
15,076,726 |
(i) Annual base
salary paid from January to December of each year.
(ii) STI - Bonus
for each performance period paid in Q1 of the following year.
(iii) Share awards
include: DSP awarded for each performance period granted in Q1 of following year and PSP granted in Q1 of reported year.
(iv) Other Compensation
refers to car allowance, life and disability premiums, health insurance premiums and pension paid in the reported year.
Realized pay Supplemental Table
|
Mauricio Ramos (CEO) |
In USD |
2023 |
2022 |
Base Salary |
1,224,863 |
1,215,944 |
Car Allowance |
15,000 |
15,000 |
Pension Expense |
293,473 |
286,846 |
Total Fixed |
1,533,335 |
1,517,789 |
Annual Bonus Paid (i) |
1,650,460 |
2,164,320 |
Deferred Share Units Vested (ii) |
694,296 |
865,762 |
LTIP Vested (iii) |
|
|
MSU Paid |
481,860 |
|
Total Variable Paid |
2,826,616 |
3,030,082 |
Total Realized Paid |
4,359,951 |
4,547,871 |
% Fixed |
35.17% |
33.37% |
% Variable |
64.83% |
66.63% |
(i)
Annual bonus paid is the cash portion for the STI for the performance periods 2023 and 2022 (paid in Q1 of the following year).
(ii) Deferred
Share Units Vested are the pro-rata vesting shares from STI (2023 displays the amount vested in Q1 2023: 30% from 2022 grant, 30% from
2021 grant and 40% from 2020 grant).
(iii) LTIP Vested
are the shares vested from the cliff vesting of the LTI granted three years prior (2023 displays the amount vested in Q1 2023 from 2020
grant, where the payout was zero).
On
average (considering 2023 and 2022) CEO realized pay has been 37% of reported pay and approximately
64% of his compensation is delivered in the form of shares.
3.3 Performance on STI 2023
As in previous years, the
annual bonus is determined by a mixture of business performance and individual performance factors. The business performance factors included
measures of service revenue, earnings before interest, tax, depreciation and amortization (EBITDA), operating free cash flow after leases
(OFCFaL) and a customer satisfaction metric based on Relational Net Promoter Score achievement. The use and relative weighting of financial
performance target measures under the variable compensation rules are equal for all employees regardless of seniority or area of operation.
This includes the CEO and the senior leadership team.
Base Salary |
x |
Target Percentage |
x |
Business Performance Factors |
+ |
Individual Performance Amounts |
= |
Annual Incentive Amount |
For the CEO and senior leadership
team, a portion of the STI is paid in the form of deferred share units with a three-year pro-rated vesting, strengthening our pay for
performance and retention incentives. For 2023, the achievement of performance targets is set out in the table below:
Weight |
20% |
20% |
20% |
10% |
30% |
100% |
Metric |
Service Revenue (i) |
EBITDA (ii) |
OFCFAL (iii) |
+NPS (iv) |
Personal Performance (v) |
|
Max |
$6.00billion |
$2.70billion |
$0.74billion |
110% |
60% |
|
Target |
$5.80billion |
$2.50billion |
$0.69billion |
100% |
30% |
|
Min |
$5.50billion |
$2.40billion |
$0.65billion |
95% |
% |
|
Achievement |
99.50% |
95.80% |
97.20% |
108.00% |
100.00% |
102.00% |
(i) Service Revenue: Is revenue related
to the provision of ongoing services, excluding telephone and equipment sales.
(ii) EBITDA: Is operating profit excluding
impairment losses, depreciation & amortization, and gain/losses on fixed assets disposals.
(iii) Operational Free Cash Flow after
Leases = EBITDA Lease payments Cash Out - CapEx +/- Operating Working Capital Tax paid (excl deferred tax).
(iv) Measures the willingness of customers
to recommend a companys products or services to others.
(v) Based on a performance rating scale
For the CEO and other eligible DSP participants,
the issuance of share units under the DSP is presented at Millicoms AGM of shareholders.
Under the 2023 STI, the 2024
DSP share units are granted in Q1 2024 and will vest (generally subject to the participant still being employed by the Millicom group)
at 30% in Q1 2025, 30% in Q1 2026 and 40% in Q1 2027. The vesting schedule is unchanged from the 2023 DSP.
3.4 LTI (PSP)
The LTI payout is calculated as follows:
Base Salary |
x |
Target Percentage |
x |
Business Performance Factors |
= |
LTI Payout |
3.4.1 LTI (PSP) 2021 Performance
The LTI 2021 plan vested in
January 2024 with an award of 92.6%. The outcome of LTI 2021 has been audited by Ernst &
Young in respect of the financial performance measures and by Towers Watson for the TSR. The COVID related, one time RSU component also
vested on January 1, 2024.
For LTI 2021, the achievement of performance targets
is set out in the table below:
Weight |
30% |
15% |
20% |
35% |
100% |
Metric |
OCFaL (iii) |
Service Revenue (i) |
Relative Total Shareholder Return (iv) |
RSU |
|
Max |
$4.08billion |
$21.24billion |
Above median |
No maximum |
|
Target |
$3.40billion |
$17.70billion |
Median |
0.35 |
|
Min |
$2.72billion |
$14.16billion |
Median |
No minimum |
|
Achievement |
104.90% |
105.90% |
Below median |
100% |
92.60% |
(i) (iii) Refer to the definitions
above.
(iv) Relative TSR considered a compound
annual growth rate and the following peers: America Movil, Telefonica, TIM Brazil, TEF Brazil, Entel Chile, Lilac.
The PSP 2021 meet the criteria
for vesting for the CEO and CFO awards:
Name |
Type of award |
Basis of award |
Face value of award |
Number of share units granted |
End of performance period |
Achievement |
Number of shares vested |
Mauricio Ramos (CEO) |
LTI2021 |
315% of salary |
7,171,190 |
|
203,727 |
|
Jan-24 |
92.60 |
% |
188,651 |
|
Tim Pennington (Former CFO) (i) |
LTI2021 |
175% of salary |
1,237,773 |
|
35,164 |
|
Jan-24 |
73.88 |
% |
25,979 |
|
(i) For Mr. Tim Pennington
(Former CFO) Number of shares vested was prorated based on financial performance and employment end date. Mr. Bruha (CFO) started January
12, 2022, and took over the CFO role effective April 1, 2022.
Deviations from the guidelines:
in special circumstances, the Board may deviate from the above guidelines, such as providing additional variable remuneration in the case
of exceptional performance. In these instances, the Board will explain the reason for the deviation at the following AGM. For the LTI
in this reviewPSP 2021, PSP 2022 and PSP 2023no discretion has been exercised and none of the performance or other conditions have been
changed.
3.4.2 Award LTI 2023
A new plan was issued in 2023 to 39 participants,
including the CEO and CFO, in accordance with the remuneration policy guidelines designed to drive shareholder value through a focus on
service revenue growth, cash flow generation and relative total shareholder return against a relevant peer group. The PSP 2023 plan was
approved by shareholders at the 2023 AGM:
Metric |
Weighting |
Performance target |
Performance measure |
Service revenue |
30 |
% |
Target growth |
A specific 3-year Cumulative Growth target |
OCFaL |
50 |
% |
Target growth |
A specific 3-year Cumulative Growth target |
TSR |
10 |
% |
The Company TSR relative to a peer group between 2022 and 2024 |
At median - target payout; below median - nil; 20% above median - max |
ESG |
10 |
% |
The five key ESG metrics that will be used to measure progress are:
1. Female % of Total Employees ; 2. Female % of Leadership; 3. Progress toward established SBTi targets; 4. Women and girls trained as part of our Conectadas Program; 5. Teachers trained as part of our Maestr@sConectad@s program. |
The payout curve is between 80% and 120% of the target, the corresponding portion of the grant will be adjusted in linear pro rata of the achievement, starting at a payout of 0% at an achievement of 80% up to a maximum value of 200% if the target achievement is 120% or higher. |
The peer group for the PSP 2023 is: America Movil,
TIM Brazil, TEF Brazil, Entel Chile, Lilac, Telecom Argentina, Grupo Televisa, Megacable.
For the CEO and CFO the award of LTI 2023 is summarized
below;
Name |
Type of award |
Basis of award |
Face value of award |
Number of share units granted* |
End of performance period |
Mauricio Ramos
(CEO) |
PSU - 3 years |
315% of salary |
$ |
3,857,286 |
|
308,172 |
|
January 2026 |
|
Cliff Vesting |
|
|
|
|
Sheldon Bruha (CFO) |
PSU - 3 years |
115% of salary |
$ |
718,557 |
|
57,408 |
|
January 2026 |
|
Cliff Vesting |
|
|
|
|
4. Remuneration Approach for 2024
For 2024, the Board has proposed
continuing with a consistent framework of STI and LTI with a few changes explained below.
For the STI there was a redistribution
of metrics, and an introduction of the "Equity Free Cash Flow" metric. The STI metrics are aligned to our financial objectives.
The metrics for the STI are:
1. Service Revenue: 25%
2. EBITDA: 25%
3. EFCF: 25%
4. Personal Performance: 25%
For the LTI, the Board is
considering a structure focused on shareholder value creation and share price growth.
For the CEO, the 'at target' and 'maximum' remuneration
for 2024 is set out below*:
At Target |
$ '000 |
|
At Maximum |
$ '000 |
Cash (including base pay, car allowance, pension and STI bonus) |
2,758 |
|
|
Cash (including base pay, car allowance, pension and STI bonus) |
4,289 |
|
Benefits |
73 |
|
|
Benefits |
73 |
|
Shares |
7,104 |
|
|
Shares |
11,547 |
|
Total |
9,935 |
|
|
Total |
15,909 |
|
Fixed |
1,606 |
|
|
Fixed |
1,606 |
|
Variable |
8,329 |
|
|
Variable |
14,303 |
|
Total |
9,935 |
|
|
Total |
15,909 |
|
At target, CEO compensation is paid 72% in share
units and 84% in variable compensation. At maximum, CEO compensation is paid 73%in share units and 90% in variable compensation.
5. Supplemental topics
5.1 Summary of Outstanding Awards
|
|
|
|
|
|
|
Opening Balance |
During the Year |
|
Closing Balance |
Name |
Plan Type |
Award Details - Plan Name |
Performance Period |
Award Grant Date |
Vesting Date |
Award Share Price in USD |
Outstanding Balance as of Dec. 2022 |
Share Units Granted in 2023 |
Shares Vested in 2023 |
Forfeited in 2023 |
Outstanding Balance as of Dec. 2023 |
Mauricio Ramos
(CEO) |
Deferred Share Plan |
2020 DSP |
2019 |
1/1/2020 |
1/1/2023 |
$ |
45.86 |
|
15,858 |
|
|
|
15,858 |
|
|
|
|
2021 DSP |
2020 |
1/1/2021 |
1/1/2024 |
$ |
35.20 |
|
32,957 |
|
|
|
14,135 |
|
|
|
18,822 |
2022 DSP |
2021 |
1/1/2022 |
1/1/2025 |
$ |
33.11 |
|
83,262 |
|
|
|
24,979 |
|
|
|
58,283 |
2023 DSP |
2022 |
1/1/2023 |
1/1/2026 |
$ |
12.52 |
|
|
|
349,339 |
|
|
|
|
|
349,339 |
Performance Share Plan |
2020 PSP |
2020-2023 |
3/1/2020 |
1/1/2023 |
$ |
45.86 |
|
39,094 |
|
|
|
|
|
39,094 |
|
|
2021 PSP |
2021-2024 |
3/1/2021 |
1/1/2024 |
$ |
35.20 |
|
203,727 |
|
|
|
|
|
|
|
203,727 |
2022 PSP |
2022-2025 |
1/1/2022 |
1/1/2025 |
$ |
33.11 |
|
144,108 |
|
|
|
|
|
|
|
144,108 |
2023 PSP |
2023-2026 |
1/1/2023 |
1/1/2026 |
$ |
12.52 |
|
|
|
308,172 |
|
|
|
|
|
308,172 |
TOTAL Mauricio Ramos (CEO) |
|
|
|
|
|
|
519,006 |
|
657,511 |
|
54,972 |
|
39,094 |
|
1,082,451 |
Tim Pennington
(Former CFO) |
Deferred Share Plan |
2020 DSP |
2019 |
1/1/2020 |
1/1/2023 |
$ |
45.86 |
|
6,958 |
|
|
|
|
|
|
|
|
2021 DSP |
2020 |
1/1/2021 |
1/1/2024 |
$ |
35.20 |
|
12,890 |
|
|
|
|
|
|
|
|
2022 DSP |
2021 |
1/1/2022 |
1/1/2025 |
$ |
33.11 |
|
37,280 |
|
|
|
|
|
|
|
|
2023 DSP |
2022 |
1/1/2023 |
1/1/2026 |
$ |
12.52 |
|
|
|
|
|
|
|
|
|
|
Performance Share Plan |
2020 PSP |
2020-2023 |
3/1/2020 |
1/1/2023 |
$ |
45.86 |
|
8,338 |
|
|
|
|
|
|
|
|
2021 PSP |
2021-2024 |
3/1/2021 |
1/1/2024 |
$ |
35.20 |
|
44,790 |
|
|
|
|
|
|
|
|
2022 PSP |
2022-2025 |
1/1/2022 |
1/1/2025 |
$ |
33.11 |
|
|
|
|
|
|
|
|
|
|
2023 PSP |
2023-2026 |
1/1/2023 |
1/1/2026 |
$ |
12.52 |
|
|
|
|
|
|
|
|
|
|
TOTAL Tim Pennington (Former CFO) |
|
|
|
|
|
|
110,256 |
|
|
|
|
|
|
|
|
Sheldon Bruha (CFO) |
Deferred Share Plan |
2020 DSP |
2019 |
1/1/2020 |
1/1/2023 |
45.86 |
|
|
|
|
|
|
|
|
|
2021 DSP |
2020 |
1/1/2021 |
1/1/2024 |
35.2 |
|
|
|
|
|
|
|
|
|
2022 DSP |
2021 |
1/1/2022 |
1/1/2025 |
33.11 |
|
|
|
|
|
|
|
|
|
2023 DSP |
2022 |
1/1/2023 |
1/1/2026 |
12.52 |
|
|
77,790 |
|
|
|
|
|
77,790 |
Performance Share Plan |
2020 PSP |
2020-2023 |
3/1/2020 |
1/1/2023 |
45.86 |
|
|
|
|
|
|
|
|
|
2021 PSP |
2021-2024 |
3/1/2021 |
1/1/2024 |
35.2 |
|
|
|
|
|
|
|
|
|
2022 PSP |
2022-2025 |
1/1/2022 |
1/1/2025 |
33.11 |
27,649 |
|
|
|
|
|
|
|
27,649 |
2023 PSP |
2023-2026 |
1/1/2023 |
1/1/2026 |
12.52 |
|
|
57,408 |
|
|
|
|
|
57,408 |
TOTAL Sheldon Bruha (CFO) |
|
|
|
|
|
|
27,649 |
|
135,198 |
|
|
|
|
|
162,847 |
5.2 Summary of Shares Owned vs Target
Millicom’s share ownership
policy sets out the Compensation Committees requirements for the Global Senior Management Team to retain and hold a personal holding of
common shares in the Company to align their interests with those of our shareholders. All share plan participants in the Global Senior
Management Team are required to own Millicom shares to a value of a percentage of their respective base salary as of January 1 of each
calendar year.
For that purpose, we continue to uphold our share
ownership requirements for our top 50 roles:
Global Senior Management Level |
% of Annual Base Pay |
CEO |
400 |
CFO |
200 |
EVPs |
100 |
General Managers and VPs |
50 |
For the CEO and CFO:
|
Awarded unvested subject to performance conditions |
Awarded unvested not subject to performance conditions |
Shares required to be held as % salary |
Number of shares required to be held |
Number of beneficially owned shares |
Shareholding requirement in Compliance |
Mauricio Ramos
(CEO) |
656,007 |
426,444 |
400% |
391,329 |
459,948 |
Yes |
Sheldon Bruha (CFO) |
85,057 |
77,790 |
200% |
103,833 |
|
Yes * |
*Unless this requirement is met each year, no vested Millicom shares
can be sold by the individual.
5.3 Details of Share Purchase and Sale Activity
During 2023, there were no acquisitions or disposal
of shares by CEO, other than the vesting and issuance of shares under the share-based compensation program.
5.4 Historic CEO and CFO Pay
|
2020 vs. 2019 |
2021 vs. 2020 |
2022 vs. 2021 |
2023 vs 2022 |
Information Regarding 2023 (USD millions, except as indicated) |
CEO Remuneration* |
9.20 |
% |
17.80 |
% |
(41.82) |
% |
(7.47) |
% |
10.51 |
Former CFO Remuneration |
(4.20) |
% |
33.40 |
% |
(87.00) |
% |
|
% |
|
Current CFO Remuneration** |
|
% |
|
% |
|
% |
0.37 |
% |
3.05 |
EBITDA for Total Reportable Segments |
(1.40) |
% |
5.90 |
% |
(1.50) |
% |
(1.08) |
% |
2.6 (USD billions) |
Average remuneration on FTE basis of employees of parent company*** |
0.50 |
% |
3.60 |
% |
3.90 |
% |
10.2 |
% |
28,941 (USD thousands) |
*Represents year-over-year changes
in CEO/CFO compensation (excludes MSU).
** Current CFO started January 12,
2022, and took over the CFO role effective April 1, 2022
***Average remuneration on a full-time
equivalent basis of employees of the Millicom Group other than the CEO, reported by each individual operation as of December 31, 2023.
5.5 2023 AGM vote
|
Votes For |
% |
Votes Against |
% |
Abstentions |
Director Remuneration |
95,590,466 |
|
99.81 |
% |
271,256 |
|
0.28 |
% |
80,036 |
Senior Management Remuneration Guidelines and Policy |
85,874,637 |
|
92.28 |
% |
7,185,753 |
|
7.72 |
% |
2,610,112 |
2022 Remuneration Report |
94,969,425 |
|
99.47 |
% |
507,704 |
|
0.53 |
% |
193,373 |
Millicom CEO and Executive Team
CEO and COO |
Position |
Role and responsibilities |
Mr. Mauricio Ramos |
CEO |
Leading the development and execution of the Companys strategy |
Overseeing day-to-day activities and management decisions
Acting as liaison between the Board and management of the Company
Leading the Executive Team
|
Mr. Maxime Lombardini |
President and Chief Operating Officer |
Responsible for leading all operational and financial responsibilities with a focus on driving profitable growth. He oversees Operations, Commercial, New Ventures, HR and Finance. |
Mr. Mauricio Ramos
Chief Executive Officer and Executive Director (Interim Chairman)
Mauricio's biography is presented in the Board Governance section of
this Annual Report.
Mr. Maxime Lombardini
President and Chief Operating Officer
Maxime was appointed as President and Chief Operating Officer (COO)
in September 2023.
Maxime joined the Iliad Group, one of the major players in the European
telecoms sector, in 2007, as Chief Executive Officer and continued his tenure through 2018. In May of 2018, he assumed the role of Chairman
of Iliads Board of Directors until March 2020. Since then, he has served as the Vice-Chairman of the Board of Directors.
Prior to joining Iliad, Maxime has been CEO of TF1 Production, one of
the leading French commercial television network. While in this post he restructured and energized the group's six subsidiaries. From
1999 to 2003, he was head of business development at TF1, a position in which he studied and implemented the group's growth operations.
From 1996 to 1999, he was the company secretary of TPS (a subsidiary of TF1 and M6), a position in which he took part in launching a digital
satellite package.
Maxime is from France. He is a graduate of the Sciences Po Paris and
holder of a Master's degree in business and tax law from the University of Paris II.
MILLICOM SHAREHOLDING AT JANUARY 31, 2024: no shares
Millicom’s Executive Team members support the CEO
and COO in the day-to-day operation and management of the Group within their specific areas of expertise. The Executive Team meets at
least once a month and more frequently when required. Millicom’s Executive Team is as follows:
Executive |
Team |
Role responsibilities |
Mr. Sheldon Bruha |
Chief Financial Officer |
Finance and financial planning; financial performance reporting, including external financial reporting; budgeting, forecasting and monitoring expenditures and costs; certain procurement activities; implementation and enhancement of related controls; risk management |
Mr. Xavier Rocoplan |
Chief Commercial and Technology Officer |
Networks, information technology and cybersecurity within the Group. Operations and business development. |
Mr. Karim Lesina |
Chief External Affairs Officer |
Government relations, regulatory affairs, corporate communications and corporate responsibility |
Mr. Salvador Escalón |
Chief Legal and Compliance Officer |
Legal and corporate governance matters, including oversight, identification and management of legal issues, risks and claims of the Group; legal aspects of mergers and acquisitions and other corporate and commercial transactions; data privacy; compliance matters such as ethics, anti-bribery, anti-corruption, anti-money laundering and related compliance programs |
The profiles of the other Executive Team members are provided below:
Mr. Sheldon Bruha
Executive Vice President, Chief Financial Officer
Sheldon joined Millicom in January 2022 and was appointed as Chief Financial
Officer on April 1, 2022.
Prior to joining Millicom, he was the Chief Financial Officer at Frontier
Communications, one of the largest fixed-line communication providers in the U.S., where he successfully helped navigate the business
through its financial restructuring. Prior to joining Frontier, he held several senior financial leadership roles at Cable & Wireless,
including Head of Corporate Development, where he led the strategic transformation and reshaping of the company prior to its sale to Liberty
Latin America. He also held senior financial leadership roles at CDI Corp. Sheldon started his career at Lehman Brothers, holding senior
investment banking positions in its New York and London offices focusing on the telecommunications industry.
He is an American national and holds a Bachelor of Science (Honors)
in Business Administration from Washington University.
MILLICOM SHAREHOLDING AT JANUARY 31, 2024: no shares1
Mr. Xavier Rocoplan
Executive Vice President, Chief Commercial and Technology Officer
Xavier joined the Executive Team as Chief Technology and Information
Technology Officer in December 2012 and was appointed Chief Commercial and Technology Officer in June 2023.
Xavier started at Millicom in 2000, initially serving as CTO in Vietnam
and subsequently Southeast Asia. In 2004, he became CEO of Paktel, Millicom's subsidiary in Pakistan, where he launched Paktels GSM operation
and led the process that concluded with the disposal of the business in 2007. Xavier then served as head of Corporate Business Development,
where he managed the disposal of various Millicom operations in Asia, the monetization of Millicom infrastructure assets (towers), and
numerous spectrum acquisitions and license renewal processes in Africa and Latin America.
Xavier
is a French national. He holds a Master's in Engineering from Ecole Nationale Supérieure des Télécommunications de Paris
and a Master's in Economics from Université Paris IX Dauphine.
MILLICOM SHAREHOLDING AT JANUARY 31, 2024: 111,208 shares
Mr. Karim Lesina
Executive Vice President, Chief External Affairs Officer
Karim joined the Executive Team as Executive Vice President, Chief External
Affairs Officer in November 2020.
Previously, he held the position of Senior Vice President, International
External and Regulatory Affairs at AT&T, where he directed the internal international and regulatory affairs teams, as well as the
external and regulatory affairs teams, across four international affiliates: Turner, Warner Media, AT&T Latin America and Direct TV.
Prior to AT&T, Karim led the corporate affairs team at Intel as the Government Affairs Manager for Europe, Africa and the Middle East.
Rounding out a strong portfolio, he acquired extensive agency experience through his work with multinational public relations and communications
firms at the commencement of his career.
Born in Dakar (Senegal), Karim is an Italian-Tunisian national and has
a Masters in Economics of Development at the Catholic University of Louvain-la-Neuve.
MILLICOM SHAREHOLDING AT JANUARY 31, 2024: 32,339 shares
1 Refer
to section starting on page 127
for outstanding share awards
Mr. Salvador Escalón
Executive Vice President, Chief Legal and Compliance Officer
Salvador became General Counsel in 2013, Executive Vice President in
2015 and Chief Legal and Compliance Officer in 2020.
Salvador joined Millicom as Associate General Counsel Latin America
in 2010. From 2006 to 2010, Salvador was Senior Counsel at Chevron Corporation, with responsibility for legal matters related to Chevrons
downstream operations in Latin America. Previously, he practiced at the law firms Skadden, Morgan Lewis and Akerman Senterfitt.
Salvador is an American national. He holds a J.D. from Columbia Law
School and a B.B.A. in Finance and International Business from Florida International University.
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