Qtel eyes buyout of partner in Asiacell

Qtel eyes buyout of partner in Asiacell

Qtel eyeing Merchant Bridge's 19-pct stake in Asiacell; Morgan Stanley advising Qtel, C.Suisse assisting MerchantBridge; Sale likely before IPO; Asiacell is Iraq's No.2 mobile operator

January 19, 2012 2:23 by Reuters

Qatar Telecom (Qtel) plans to buy out a private equity partner’s stake in Iraqi telecoms operator Asiacell before offering shares in the company to the public, two banking sources said on Tuesday.

Qtel has a 30-percent stake in Asiacell, Iraq’s number two operator, while London-based partner MerchantBridge has 19 percent.

Morgan Stanley is assisting Qtel in the process, while MerchantBridge is being advised by Credit Suisse , the sources said on condition of anonymity.

In October, Asiacell appointed HSBC and Morgan Stanley to manage an initial public offering of its shares in Iraq. A sale of MerchantBridge’s stake was likely to happen before the IPO, the sources said.

MerchantBridge was not immediately available for comment. A Qtel spokesman in Doha declined to comment.

Asiacell had 8.7 million subscribers at the end of September 2011, giving it a 34-percent market share, down from 37 percent a year earlier.

Qtel owns controlling stakes in Kuwait’s Wataniya, Oman’s Nawras and Indonesia’s Indosat.

Unusually for a state-owned telco, just 20 percent of Qtel’s revenue comes from its home market. Iraq provided 18 percent of Qtel’s revenue in the first nine months of 2011.

MANDATORY IPOS
Asiacell was awarded a 15-year mobile licence in 2007, as were Zain’s Iraq unit and France Telecom affiliate Korek. Asiacell paid $1.25 billion for the licence.

Under the terms of their licences, the three operators were meant to launch mandatory IPOs to offload 25 percent of their shares by the end of August 2011, but all three missed the deadline, saying the fledgling Iraqi bourse was ill prepared for the listings.

Iraq’s bourse has a market capitalisation of just $4 billion and average daily trading of less than $2 million, prompting analysts to question whether the market is ready for the telecoms IPOs. (Additional reporting by Matt Smith in Dubai) *image from commsmea.com