VENTURES AFRICA – Etisalat is keen to expand its share of the telecommunications sector in Africa following reports that the Abu Dhabi based company has opened talks with banks to secure around $8 billion in loan funds meant to finance its bid for a 53 percent stake in Maroc Telecom.
Vivendi currently owns the 53 percent Maroc Telecom stake that Etisalat is raising funds to bid for. Reuters quoted banking sector officials on Friday confirming the development.
It has also emerged that some of the banks stand to pocket huge sums of money from merger and acquisition as well as advisory roles for the deal.
Revelations that Etisalat is keen to expand its presence in Africa through buying into Maroc Telecom come in the wake of reports that French president, Francois Hollande, asked Vivendi to delay the disposal of its stake in the Moroccan telecommunications company.
Vivendi has however firmly refuted the reports, which indicated that Hollande had pleaded with Vivendi to only proceed with the disposal of its stake in Maroc Telecom – which runs Malitel in the civil war ravaged West African country – only after the war in Mali has ended.
Maroc Telecom also has a significant presence in the region through telecom operations in Mauritania and Burkina Faso.
Other bidders are also keen to snap up Vivendi’s stake in Maroc Telecom. Qatar based Qtel is said to be keen on bidding for the stake amid claims that it has engaged JP Morgan about a possible loan to finance its bid.
Another company, KT Corp, a South Korean telecommunications company, is also said to have lined up three high profile banks – Societe Generale, Credit Suisse and Citigroup – to advise and structure a possible merger should it succeed in its bid.
Despite this, the $8 billion acquisition loan that Etisalat is seeking from the banks with whom it has opened talks is likely to be the biggest merger and acquisition loan in the Gulf region in over six years.
Steve Evans, the chief executive officer of Etisalat Nigeria, has projected a 40 percent annual growth rate for mobile broadband access across Africa in the period up to 2015.
“Africa has shown enormous potential for growth in mobile broadband services and analysts say that if the success in the GSM services is anything to go by, stakeholders predict a boom in broadband services in the continent,” he said
Pressure has been mounting on Vivendi to turn-around the fortunes of the company at a time when its share price has taken a tumble in the past few years. Rating agencies have also painted a near negative picture of the company, which has a debt of about 15.7 billion Euros ($21 billion).