Etisalat shareholders set $8.75bn borrowing limit for Maroc Telecom stake bid

Etisalat has bid for French conglomerate Vivendi’s 53 per cent stake in Maroc Telecom, Morocco’s largest telecoms operator. Alia Jeiroudi for The National

Etisalat's shareholders have agreed to raise external funding in excess of the company's capital to pursue a majority stake in Maroc Telecom.

Shareholders convened in an extraordinary general assembly meeting on Tuesday night at the company’s headquarters to discuss the board’s recommendation. Shareholders outlined a cap of US$8.75 billion on the amount Etisalat can borrow to fund the acquisition.

Etisalat and Ooredoo are vying for the French conglomerate Vivendi's 53 per cent stake in Maroc Telecom, Morocco's largest telecoms operator.

This week Reuters reported that Etisalat had placed a higher bid than its rival, but had put forward more legal conditions that it wanted to be met that are holding up Vivendi’s decision.

The stake is worth some $6bn according to market value, but analysts believe both Etisalat and Ooredoo have placed a bid somewhere between the $4bn to $5bn mark.

“Etisalat has put in the highest bid but it seems Ooredoo has met more of the conditions. It is hard to say which is likely to win because they are very similar in terms of background. Both have good access to finance with similar strategic rationale so it might come down to more behind-the- scenes negotiating,” said Matthew Reed, the principal analyst at Informa Telecoms & Media.

The Moroccan government, which owns a 30 per cent stake in Maroc Telecom, will have final approval of the buyer.

"The Moroccan government may pick one of the parties that is going to bring more formal investment to Morocco," Mr Reed said.
The UAE has been recently ramping up its investment in the North African kingdom.

Last year Invest AD obtained a licence to set up in Casablanca Finance City. The Abu Dhabi Development Fund has a stake in five Moroccan companies including Société Rebab, which is listed on the Casablanca Stock Exchange, and Union Maroc Emirats Arabes Unis de Pêche, an agricultural company.