عربــى

EGX 30 13,711.01 -0.07%



UPDATE 4-The full story: STC's acquisition of Vodafone Egypt stake

UPDATE 4-The full story: STC's acquisition of Vodafone Egypt stake

ArabFinance:  Vodafone Group hires Linklaters as legal counsel for Saudi Telecom Company’s (STC) acquisition of Vodafone Egypt, reported by Alborsaa News. It tapped Goldman Sachs earlier this week to advise on the transaction.

Telecom Egypt asked 4 investment banks such as EFG-Hermes, CI Capital, HSBC and Citi Bank to submit preliminary offers to be financial advisor for potential acquisition, informed sources told Hapi Journal on Feb. 09. 

The potential acquisition would be credit negative if the transaction is fully debt-funded, Moody’s said in a report.

The transaction, if fully debt-funded, would increase STC's leverage (debt/EBITDA) to around 1.0x from 0.7x as of year-end 2019, a credit negative because leverage would be high for STC's A1 rating, the rating agency said in a note.

Telecom Egypt stated on Feb. 05, 2020, it is in the process of appointing an investment bank(s) to study all of its possible investment options and opportunities pertaining to the STC's acquisition. 

Telecom Egypt won't resort to pre-emption to purchase Vodafone International’s stake in the local subsidiary, economic experts told Reuters.

National Telecom Regulatory Authority (NTRA) commented on Jan. 30, 2020 on the Saudi Telecom Company's (STC) potential acquisition. NTRA said Vodafone Egypt is adhered to get a written pre-approval from it on any change in the legal entity or the proportions of shareholders within the company in accordance with the conditions determined by the Authority’s Board of Directors.

STC said on Wednesday, Jan. 29, 2020 it has signed a preliminary agreement to buy Vodafone's 55% stake in Vodafone Egypt for $2.4 billion.

The non-binding Memorandum of Understanding values Vodafone Egypt at $4.4 billion and is valid for 75 days from Wednesday, STC said in a bourse statement. It can be extended by mutual consent.

A binding agreement is subject to approvals by STC and Vodafone, and regulators. STC said no other parties were involved in the potential deal.

Telecom Egypt announced late on Wednesday, meeting with representatives from Vodafone Group on the 28th of January to discuss this matter. It said that it is closely following the acquisition procedures to consider all the possible ways it may deal with its investment in Vodafone Egypt given its rights that are stipulated in the shareholder agreement. Any decision taken will be based on the final form of the potential acquisition. 

Alexandre Froment Curtil, CEO of Vodafone Egypt, explained to the press on Tuesday that STC expressed its appreciation to Vodafone Egypt’s administration and stressed that they had no intention to make any changes in the management structure.

Vodafone would benefit from the Saudi company’s experience in spreading digital communication services in Egypt, and contributing to the implementation of the nationwide comprehensive health insurance project.

STC, also known as Saudi Telecom, is majority-owned by Saudi Arabia’s state fund the Public Investment Fund (PIF). It is a Saudi Arabia-based telecommunications company that offers landline, mobile, Internet services and computer networks.

Vodafone Egypt is the leading player in the Egyptian mobile market and we look forward to contributing further to its continuing success. In January 2002, Click GSM was rebranded to Vodafone Egypt. Since 2007, Vodafone Egypt’s shareholders structure consisted of Vodafone Group with 54.93%; Telecom Egypt with 44.94% and a minority free float of 0.13%.

#Related keywords

All rights reserved to Arab Finance 2015 ©

Back to top