Banking sources have revealed the Abu Dhabi telecom group Etisalat will be signing a USD 8 billion loan facility next week with up to 16 banks to finance its bid for the takeover of Maroc Telecom.
Speaking to Arabian Business, bankers said the proposed loan deal shows that banks are willing to lend huge sums to the most established players in the Gulf. The sale of Maroc Telecom would allow Etisalat to secure an asset, while the deal is also vital for restructuring efforts at French group Vivendi, the current owner of Maroc Telecom’s 53 percent stake.
Etisalat can fund half the amount through a six-month bridge loan, to be refinanced later by a bond issue, according to some bankers. The remaining USD 4 billion will be financed through a three-year “bullet” loan, payable at the end of the loan, and a five-year amortizing facility. The repayment and applicable interest will be made at scheduled times during the duration of the amortized facility.
Vivendi is seeking to sell its ownership in the Moroccan company, valued at USD 6 billion, to reduce debts and instead, increase focus on media. However, potential buyers were forced to raise more cash to buy up stakes from minority shareholders. The binding bids for the sell-off are due to be opened on April 22, and on April 25, Etisalat is expected to sign the loan facility. The potential buyer must prove sufficient funds exist and are available to purchase the stake.
Previously, Vivendi failed to sell video game unit Activision Blizzard and Brazil telecom unit GVT. The Maroc Telecom sale is important for the strategic direction of the company. Etisalat will be competing with Qatar’s Ooredoo for the sale. South Korea’s KT Corp, another potential rival, has quit the race.