Register for our free newsletter

Latest News

INTERVIEW: Etisalat may buy new stake

Mobile Phone

The UAE based telecom service provider may be buying a stake in Saudi's mobily

July 26, 2012 9:40 by

Etisalat, the United Arab Emirates No.1 telco, may raise its holding in Saudi Arabia affiliate Mobily, the firm’s chief executive said on Wednesday, in what could give a major boost to its bottom line if it took a majority stake.

The former monopoly is also undertaking a review of all its operations across the 17 countries in which it operates, Ahmad Julfar told Reuters, as it seeks to boost returns to shareholders following a multibillion dollar foreign expansion over the past decade that has so far added little to the bottom line.

This overhaul may include selling some of its African subsidiary Atlantique Telecom units, but Etisalat has put on hold plans to offload its 13 percent stake in Indonesia’s XL Axiata, Julfar said.

He also said the company would decide by the year end whether to take an impairment charge on affiliatePakistan Telecommunication (PTCL), for which it originally paid $2.6 bln for a 26 pct stake but is now worth about $150 million according to market value on Karachi SE.

At present Etisalat does not fully consolidate Mobily’s earnings because it owns only a 27-28 percent stake in Saudi’s No.2 operator.

Mobily reported a 22 percent rise in second-quarter profit to 1.42 billion riyals ($379 million) last week, while its 2011 annual profit was 5.08 billion riyals. Etisalat made an annual profit of 5.8 billion dirhams ($1.58 billion) last year.

Julfar said Etisalat may also raise its stakes in other affiliates that operate in high growth, high population markets such as Nigeria and Pakistan.

“We have less than 50 percent (stakes) in Saudi, Nigeria and Pakistan,” said Julfar.

“(We) will be working to increase value for our shareholders as well as contributing to the social and economic development of those countries. If increasing our stake will address those three things, then definitely we will be pursuing increasing our stakes in those three markets.

“We are studying that option for Saudi Arabia.”

Mobily has a market value of $12.3 billion, according to Reuters data, while analysts say Saudi bourse rules do not prevent a foreign company taking majority control of a locally listed firm.

Tags: , , , ,

Leave a Comment