The bid for Vivendi’s stake in Maroc Telecom has become more intense with Ooredoo, formerly Qatar Telecom, reportedly raising about USD 12 billion financing for the deal.
Banking sources reveal that Ooredoo is working closely with a group of 10 banks to secure the loan to support its bid. Initial reports suggest that the loan is being provided by JP Morgan, QNB, Morgan Stanley and HSBC, as well as Barclays, Deutsche Bank, Royal Bank of Scotland, Bank of Tokyo Mitsubishi UFJ, Development Bank of Singapore and Citigroup.
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 begin April 22nd. 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. Besides Qatar’s Ooredoo, Etisalat is competing for the sale of Vivendi’s stake in the business. Media reports also highlight that Etisalat is expected to sign a USD 8 billion loan facility to support its takeover bid for Maroc Telecom.
Ooredoo has also arranged for funds to purchase the 30 percent stake of Moroccan government in the telecom company. However, Standard & Poor’s has warned Oordeoo that its rating could be downgraded if it acquires too much debt to fund future acquisitions. As a result, the company may not rely fully on loan financing and is expected to use its own cash or equity to support the bid.
Ooredoo expects the loan pricing to be favorable, but several options are under consideration for the financing structure.