Saudi Telecom Company, the biggest telecommunications operator in the kingdom by market value, pushed back the completion of its purchase of a 55 per cent stake in Vodafone Egypt for the second time, saying it needed more time to complete the transaction.
The company confirmed a deal earlier this year to buy the stake in Vodafone's Egyptian unit for $2.4 billion (Dh8.8bn) as part of its regional expansion. However, “logistical challenges” amid the ongoing coronavirus outbreak have delayed completion, STC said.
“The parties need more time to complete the processes related to the transaction, including the due diligence and they have therefore agreed to extend the [agreement] for 60 days starting from today," the company said in a statement to Tadawul, where its shares trade, on Sunday.
The deal allows STC, which is majority-owned by the kingdom's Public Investment Fund, to secure a foothold in the Arab world's most populous country while expanding its operations in the region. Egypt is one of the largest telecoms markets in North Africa, making it appealing to a number of operators.
Vodafone Egypt is the North African country's largest mobile operator in terms of active subscribers. State-run Telecom Egypt holds the remaining 45 per cent stake of the operator. The agreement with STC values Vodafone Egypt at $4.4bn.
In 2013, STC had unsuccessfully tried to acquire a 45 per cent stake of Telecom Egypt. However, analysts said Egypt's state-owned operator was more willing to sell its stake in Vodafone Egypt after launching its own mobile network called ‘We’ in 2017.
In February, Egypt’s Financial Regulatory Authority said STC should make an offer to acquire Telecom Egypt’s remaining stake in Vodafone Egypt if its deal with Vodafone goes through. The regulator cited a 1992 law that would legally bind STC into making an offer on outstanding shares if the deal materialises.
Telecom Egypt later said that it is “closely following the aforementioned potential transaction to consider all of its possible investment options and opportunities.”
However, earlier this month STC indicated it would only acquire 55 per cent of Vodafone's stake in the entity.