TE considers Vodafone Egypt acquisition as banks willing to finance deal

The TE’s move comes following the recent hiccup in the Saudi Telecom Company’s attempted acquisition of Vodafone International Group’s 55% stake in Vodafone Egypt

  
A trader works at the Egyptian stock exchange in Cairo, Egypt September 23, 2019.

A trader works at the Egyptian stock exchange in Cairo, Egypt September 23, 2019.

REUTERS/Mohamed Abd El Ghany

Telecom Egypt (TE) has assigned investment banks EFG Hermes and Citibank to evaluate possible options regarding the acquisition of Vodafone Egypt, in which TE holds partial stake, Daily News Egypt has learned.

The TE’s move comes following the recent hiccup in the Saudi Telecom Company’s (STC) attempted acquisition of Vodafone International Group’s 55% stake in Vodafone Egypt.

Sources close to the deal indicated that the two investment banks, assigned by TE, have contacted as many as five foreign banks that have expressed their willingness to finance the possible acquisition. Their financial input may be considered in case TE expresses its interest in acquiring Vodafone International Group’s stake of its Egypt operations.

The list of banks that expressed their desire to finance the deal includes Al-Mashreq Bank and First Abu Dhabi Bank (FAB). Should the deal be sealed, TE would restructure its WE mobile operator unit, and merge it with Vodafone Egypt, the sources said.

In a press statement on Sunday, TE said that it had not received any letters from STC or Vodafone International Group, in regard with the potential acquisition deal.

TE confirmed that it has not specified what path it may take in this regard, as its final decision will depend on the terms of any offer that might be presented to it in this regard.

On Sunday, STC announced the expiry of the term of a Memorandum of Understanding (MoU) that it signed with Vodafone International Group, regarding the acquisition of a 55% stake in Vodafone Egypt. The MoU came to an end without an agreement being reached to complete the deal, due to a lack of agreement between the concerned parties.

Later on Sunday, Vodafone International Group issued a statement saying that all procedures and steps for due diligence examination have been completed in relation to the possible sale.

The company added, “Despite the expiration of the MoU that was previously signed between the two parties, Vodafone International is still in the stage of negotiations and discussions with STC to complete the deal in the near future.”

It expressed its aspiration that STC and Telecom Egypt would “find a suitable agreement to complete the deal”, according to the statement.

TE has affirmed its ability to implement a number of strategic options while preserving its interests and those of its shareholders. These options include exercising the right of pre-emption guaranteed to it according to the shareholder agreement concluded with Vodafone International Group and the Articles of Association of Vodafone Egypt.

The Egyptian telecoms provider would also consider accepting any compulsory purchase offer in accordance with Chapter Twelve of the Executive Regulations of the Capital Market Law No 95 of 1992. This covers the purchase offers with intent to acquire and confirmed according to the Financial Regulatory Authority (FRA) letter in this regard.

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