French media and telecommunications group Vivendi has issued a statement to confirm press reports that talks were underway with Saudi Oger that could lead to an equity investment in Oger Telecom. Although Vivendi says it can make no further comment at this time, banking sources told Les Echos that Vivendi seeks to buy a 30-35 percent stake in the company. A source close to the group said it does not want to stay a minority partner for long, as was the case in Morocco, where the group increased its Maroc Telecom stake from 35 percent to 51 percent. Besides its home market and Morocco, Oger Telecom is present in countries such as Turkey, South Africa, Lebanon and Jordan. It has 35 million customers and turned over USD 6.9 billion last year, for a USD 2.9 billion gross operating profit.
In 2005, Oger bought 55 percent of Turk Telekom, which had 3.6 million ADSL lines at the end of June. It also owns the country’s third mobile operator, Avea, as well as South Africa’s third mobile operator. Oger tried to float Oger Telecom in 2006, but pulled out due to an unsatisfactory valuation. When Oger acquired its Turk Telkom stake, it committed to retaining a majority stake only until November 2008, at which time the door will open for Vivendi. The French group has a low level of debt, according to financial analysts.
Wireless Mobile Telecom Wireless News
Turk Telecom will roll out an IP network and expand its coverage footprint over the next three years at a cost of USD3.4 billion. It states that the fibre-optic lines to be installed by the telco will increase network capacity by 1,000 times. An additional project aims to provide services such as DSL, VoIP and IPTV for 4.3 million people living in rural parts of the country by November 2008.
Wireless Mobile Telecom Wireless News
Telegeography writes…Turkey’s largest wireline operator Turk Telecom has said it expects revenues to rise this year following a slight decrease in 2006. Lower tariffs led to a decline in sales from TRY7.4 billion (USD5.2 billion) in 2005 to TRY7.25 billion last year. The firm says sales are expected to rebound in 2007, although it did not give exact figures. Turk Telekom is 55% owned by Oger Telecom of Saudi Arabia, with the remaining 45% still state-owned.
Wireless Mobile Telecom
Menafn writes…Khaleej Times reported that Oger Telecom, which is a part of Saudi Telecom, will raise $4.3 billion through a loan in order to finance the acquisition of 55 percent of Turk Telecom.
Resources said that after Oger already paid 20 percent of the total cash in two installments in 2005, the remaining payment will be delivered over a five-year period in equal installments with an interest rate of Libor plus 2.5 percentage points. The mandated lead arrangers according to sources agreed to acquire a 55 per cent stake in Türk Telekom for $6.5 billion from the Turkish government.
Buying Turk Telecom will enable Oger to finance the final payments and refinance the earlier two installments.
In November 2005, Oger telecom canceled an IPO through which it was planning to raise $1.25 billion due to the poor performance of Gulf markets.
Resources at the Turkish Treasury said that it was intending to sell the remaining 45 percent of Turk Telecom through an IPO. However, the treasury hasn’t yet announced the date for that move.
Wireless Mobile Telecom
KhaleejTimes writes…Dubai-based Oger Telecom is in the process of raising $4.3 billion through a loan, according to investment banking sources.
Sources said yesterday that five banks have been mandated to arrange the loan which will be used to finance Oger Telecom’s 55 per cent acquisition of Turk Telekom.
The mandated lead arrangers according to sources are ABN Amro, Citigroup, BNP Paribas, Calyon and Fortis Bank. Oger Telecom, part of the Saudi Oger group, which is controlled by the family of the late Lebanese prime minister Rafiq Hariri, agreed to acquire a 55 per cent stake in Türk Telekom for $6.5 billion from the Turkish government.
Payment for the majority stake was agreed over a five-year period in equal instalments. Oger paid 20 per cent of the total in cash in 2005 and is due to pay the rest in five equal instalments with an interest rate of Libor plus 2.5 percentage points.
The new facility is aimed at financing the final payments and refinancing the earlier two instalments.
“Oger Telecom has made two payments already but wanted to accelerate the remaining instalments by paying for the stake at an earlier date. An earlier payment for the 55 per cent stake in Türk Telekom will tidy up the the financing arrangements for the acquisition, which may have implications for a planned initial public offering (IPO).
Oger had admitted to plans to borrow from international markets following its decision to cancel its IPO in November last year. Oger telecom which announced its plans to raise $1.25 billion through an IPO pulled out of the deal following the poor performance of Gulf markets. The cancelled IPO included listing of Global Depository Receipts (GDRs) on London Stock Exchange and a $150 million IPO on the Dubai International Financial Exchange.
Following the pull out from the IPO, the company management clarified the public issue has been merely postponed. The company may decide to relaunch its IPO should market conditions prove favourable.
Discussions are currently taking place with second-tier banks to commit to the $4.3 billion loan facilities, sources said, and general syndication is likely to be launched by the middle to the end of February.
The firm had wanted to list in part so that it could qualify for a mobile phone licence tender in Saudi Arabia due for 2007 as the company failed to qualify on a previous attempt because it was not a listed company. But with the removal of that requirement there is no urgency to launch an IPO.
Meanwhile, technically, the Turkish Treasury is qualified to launch an initial public offering to off-load its 45-per cent stake in Turk Telekom.
However, the Turkish government is yet to take any decision on how much it wants to sell and when it wants to sell.
Wireless Mobile Telecom
Vivendi in talks to buy Saudi Oger Telecom stake (France)
