Business

Qatar Telecom raises $12bn to finance bid for Maroc stake

Qatar Telecom raised US$12 billion to finance its bid for a majority stake in Maroc Telecom as it seeks to expand through acquisitions, its chief executive officer said.

Bloomberg News

May 27, 2013

Qatar Telecom raised US$12 billion to finance its bid for a majority stake in Maroc Telecom as it seeks to expand through acquisitions, its chief executive officer said in an interview.

Qatar Telecom, which recently changed its name to Ooredoo, plans to focus on buying telecommunication operators abroad after expanding holdings in companies in Kuwait, Iraq and Tunisia last year, Nasser Marafih said yesterday at the World Economic Forum in Jordan.

"We're aware that we've not done any acquisitions lately, but have increased our stake in our existing companies," he said. "There are companies that will be available for consolidation and when they become available they will pursue them."

The company is competing with the UAE's Etisalat to buy Vivendi's 53 per cent stake in Maroc Telecom and both made binding offers in April. The holding has a market value of about $5.6bn based on trading in Casablanca. Vivendi wants to complete the sale by October, people familiar with the matter said last month. Etisalat offered a higher price than Qatar Telecom, Reuters reported May 24, citing two people familiar with the matter it didn't identify.

Qatar Telecom submitted a "strong, compelling offer" and raised the necessary financing, Mr Marafih said. "We still believe we have a strong chance to win this bid."

Etisalat sought $8bn of loans to back its bid, two people with knowledge of the deal said last month.

Qatar Telecom plans to bid for a licence in Myanmar next month because it may be "one of the last untapped markets." The country's mobile phone penetration is about 5 per cent, Mr Marafih said.

'It's a very good opportunity in Southeast Asia,'' he said. "In terms of financing, we have the capability to do that."

* Reuters

2025 Fifa Club World Cup groups

Group A: Palmeiras, Porto, Al Ahly, Inter Miami.

Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.

Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.

Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).

Group E: River Plate, Urawa, Monterrey, Inter Milan.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

T20 World Cup Qualifier

October 18 – November 2

Opening fixtures

Friday, October 18

ICC Academy: 10am, Scotland v Singapore, 2.10pm, Netherlands v Kenya

Zayed Cricket Stadium: 2.10pm, Hong Kong v Ireland, 7.30pm, Oman v UAE

UAE squad

Ahmed Raza (captain), Rohan Mustafa, Ashfaq Ahmed, Rameez Shahzad, Darius D’Silva, Mohammed Usman, Mohammed Boota, Zawar Farid, Ghulam Shabber, Junaid Siddique, Sultan Ahmed, Imran Haider, Waheed Ahmed, Chirag Suri, Zahoor Khan

Players out: Mohammed Naveed, Shaiman Anwar, Qadeer Ahmed

Players in: Junaid Siddique, Darius D’Silva, Waheed Ahmed