Batelco on Monday agreed to acquire Cable & Wireless Communications' Islands division and a sizeable share of its Monaco Telecom stake for $680 million.
Pending regulatory approval, the deal will see the Bahraini operator take full control of CWC's operations in the Maldives, Channel Islands, Isle of Man, the Seychelles, South Atlantic and Diego Garcia. In the case of Monaco Telecom, Batelco will acquire 25% of Compagnie Monegasque de Communication SAM (CMC), the holding company for Cable & Wireless' 55% stake in Monaco Telecom.
The deal is expected to be completed by the end of CWC's current financial year, which?ends 31 March 2013. Within 12 months of completion, Batelco has an option to purchase the remaining 75% of CMC for an extra $345 million, giving it a majority stake in Monaco Telecom.
"We have been pursuing a strategy of diversification and growth in order to create a more profitable and cash generative communications group," said a statement from Batelco chairman Shaikh Hamad Bin Abdulla Al Khalifa.
He said the acquisition of CWC's Monaco and Islands division will expand Batelco's geographic footprint by 11 new markets.
"This acquisition supports our strategy by adding four new cash generative businesses, which will from the outset serve to diversify and enhance our profitability and cash flows, and complement our continued efforts to drive value and build further market leadership in our six existing businesses across the Middle East region," said Khalifa.
CWC said the sale of its Monaco and Islands division will cut its net debt position by 40% from $1.59 billion to $937 million on a pro forma basis.
The company will use $330 million of the proceeds to reduce borrowings under its revolving credit facility, while the rest will be retained as cash to be potentially invested in CWC's core Caribbean and Central American region.
"The disposal of the Monaco and Islands portfolio is consistent with our objective of building a growth-driven, Pan-America focused business," said Tony Rice, CEO of Cable & Wireless Communications. "The disposal will substantially reduce the geographic spread of our group as well as increasing our financial flexibility."
Since Cable & Wireless split into two separate companies
...Source: http://www.totaltele.com/view.aspx?ID=478113
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