DUBAI: UAE telecoms group e& said on Friday it will consider joint investments with Vodafone after buying a 9.8% stake in the British company last week, and is seeking to cooperate on procurement as well as research and development.

Hatem Dowidar, chief executive of the company formerly known as Etisalat, said he was confident in Vodafone's strategy, including streamlining the business and consolidation in Europe.

"I believe that they are clear on what needs to be done and they're trying to do it," Dowidar said in an interview when asked if Vodafone needs to move more aggressively on acquisitions.

"The channel will be open if there is an investment where us coming in as a partner makes sense for us," he said on potential co-investments.

Dowidar said e& bought the stake because it saw Vodafone as undervalued and dividend returns are higher than the cost of debt backing the deal, adding there are no plans to increase the holding "at the moment" and e& would remain a passive investor.

The $4.4 billion purchase was funded using a partly-drawn $7 billion one-year, renewable credit facility from a consortium of banks, Dowidar told Reuters, declining to name the lenders.

The two companies will cooperate on research and development such as on Open Radio Access Network, as well as procurement, including of standard parts, which would reduce costs, Dowidar said, adding that joint ventures will also be considered.

Dowidar said e& is looking at more opportunities in telecoms and expects to make small investments in venture capital.

"If we find similar opportunities to Vodafone, companies that generate good dividends, that can have some synergies with us ... we will look at it," he added.

It also expects to complete its offer to raise its stake in Saudi Arabia's Mobily to 50% by the end of the third quarter.

While e& has no current plans to raise more debt this year, it will consider issuing bonds when markets stabilise. (Reporting by Yousef Saba; Editing by Alexander Smith)