TE to acquire OTMT’s MENA Cables in USD 90 mn transaction, obtain long-term USD credit facilities
M&A WATCH- TE to acquire OTMT’s MENA Cables in USD 90 mn transaction, obtain long-term USD credit facilities: Telecom Egypt (TE) announced on Thursday that its board of directors has signed off on the decision to acquire Orascom Telecom and Media Technology’s (OTMT) MENA Submarine Cables Systems in a USD 90 mn transaction. The acquisition, which had been kept under a semi-tight lid till now, will be financed through a shareholder loan from TE to its subsidiary cable business. TE had reportedly been close to tapping EFG Hermes to advise on the acquisition, sources had said last month, around the same time that businessman Naguib Sawiris announced in a conference that he was looking to pull himself out of the telecom industry.
TE’s board also approved a decision to obtain long-term USD credit facilities, including a USD 500 mn five-year syndicated loan, which will be arranged by Mashreq and First Abu Dhabi Bank. The company will also sign a one-year credit facility agreement with a maximum ceiling of USD 200 mn with the Abu Dhabi Islamic Bank and African Bank for Import and Export, as well as a four-year, USD 200 mn vendor finance agreement with Huawei. The amounts will be used to finance capex operations and make liquidity available for investments in 4G infrastructure. Reuters also has the story.
This came as TE reported a 48% y-o-y drop in net profit after tax in 1Q2018 to EGP 688 mn, according to the company’s earnings release (pdf). Consolidated revenues recorded EGP 4.8 bn, marking a 15.4% y-o-y increase.