Emirates Telecommunications Corp. (ETISALAT) set the terms of $8 billion of loans backing its bid for a 53 percent stake in Maroc Telecom SA (IAM) being sold by Vivendi SA (VIV), according to two people with knowledge of the deal.
The company, known as Etisalat, is raising debt comprising a $4 billion portion to be refinanced by bonds, and three- and five-year loans, said the people, who asked not to be identified because the terms are private. The facility, which was reported earlier by Reuters, is being arranged by the company, they said.
Etisalat, the Middle East’s second-biggest phone operator by market value, is weighing options including debt financing to fund the potential acquisition of Vivendi’s $6 billion stake, Group Chief Executive Ahmad Julfar said earlier this year. It is vying with Qatar Telecom QSC (QTEL) for the shares after South Korea’s KT Corp. (030200) withdrew its interest this week citing “big differences” in valuations. Final binding offers for the stake are due by Monday, the people said.
Officials in Etisalat’s investor relations department didn’t return an e-mail seeking comment on the financing. The media relations department couldn’t be reached by telephone.
More than 10 banks have already committed to the Abu Dhabi- based company’s financing, and as many as 17 may participate, according to the people. Lenders can provide funds in either dollars or euros, and must commit to all parts of the deal, they said.
The six-month bridge loan can be extended to one year and the company is offering to pay an initial interest margin of 45 basis points, or 0.45 percentage points, more than the London interbank offered rate, rising to 75 basis points if extended, said the people. The three-year portion would pay a margin of less than 100 basis points more than Libor, while the five-year debt would pay less than 150 basis points, said the people.
Vivendi has hired Lazard Ltd. and Credit Agricole SA to explore a sale of the stake, people familiar with the matter have said, as it overhauls its business to refocus on media and content distribution. The Moroccan government owns 30 percent of Maroc Telecom and must sign off on any deal.
Qatar Telecom, which operates under the brand name Ooredoo, has the capacity to finance a deal, Chief Executive Officer Nasser Marafih said in February.
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