France’s Vivendi SA is selling its stakes in Maroc Telecom as part of the debt reduction plan by the Paris-based telecoms giant, reports suggested on Wednesday.
According to the North Africa Post, the sale is estimated to generate more than $5billion. Vivendi has contacted two potential investment banks but fears of political interference might have repercussions on the deal, a source revealed. Vivendi accounts for 53% of Maroc Telecom and the Moroccan government owns 30%, making it the second-largest shareholder.
Another source close the the Moroccan government hinted that meetings with potential buyers are being arranged before the introduction of interested buyers to the King. The source added that the government wants to be involved in the discussions to assure that investment guarantees will be part of the deal. “The two contacted banks by Vivendi will give their feedback to the company in November but it’s reported that they prefer a cash payment for their stakes,” the North Africa Post report said.
Maroc Telecom is the largest-capitalised company on the Casablanca stock exchange and faces fierce competition from other telecommunication companies active in the country. It is one of the main telecom operators in Africa with units in Burkina Faso, Gabon, Mali and Mauritania.
Vivendi bought its stakes in the company 11 years ago but skeptics believe that the $5billion demand for their stakes can only be met by investors from Qatar and the Emirates amidst such financial crisis despite the 8% discount on the share price of Maroc Telecom. Many traders in Casablanca insist Maroc Telecom is no longer the cash cow it was during the previous decade. Shares of the French telecom closed almost 2% down in the first reaction to reports.
Analysts have tipped Qatari operator, QTel, and United Arab Emirates-based Etisalat as potential buyers. Other potential candidates could include Spain’s Telefonica, France Telecom and South Africa’s MTN.