Egypt's state-owned Telecom Egypt has picked an inopportune time to seek a strategic investor, with global telecom operators slowing down expansion in emerging markets, Dow Jones said, quoting analysts.
Telecom Egypt mandated this week the Merrill Lynch and Egypt's Commercial International Bank to find a strategic investor for up to 34 percent of the company.
Telecom Egypt Chairman Aqueel Basheer was quoted by the newswires as saying that "we hope to find a strategic investor in six months, noting that valuation and management have still to be worked out.
But analysts, according to Dow Jones, say Telecom Egypt, like Greece's OTE and Turk Telekom, will not quickly find a strategic investor because of the poor market conditions.
"Telecom Egypt is coming to the market at a bad time because the biggest (global) telecom operators are currently selling off their non-core assets to pay back the debts they took out to fund third-generation mobile phones," said Suha Najjar, a telecom analyst at Nomura in London.
Analysts said possible bidders include Telefonica SA (TEF) of Spain, Portugal Telecom and France Telecom. The French company already has a stake in Egyptian mobile phone operator the Egyptian Co. For Mobile Services, or MobiNil. Analysts say some Asian operators such as Telekom Malaysia might be interested.
Egypt postponed the float of up to 20% of Telecom Egypt because of poor stock market conditions. But Telecom Egypt still wants to launch an IPO within a year to 18 months, said Basheer.
The IPO plan, half of which would have been offered to local and institutional investors and half to international investors, was seeking to raise between $1.2 billion and $1.4 billion. Telecom Egypt's total valuation was estimated at $6 billion and $7 billion at the time, it added.
Telecom Egypt, one of Egypt's largest and most profitable companies, has a monopoly on fixed-telephone lines – Albawaba.com
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