France Telecom-Orange (FT) has announced its acquisition of a 44 per cent stake in Iraqi mobile operator Korek Telecom in partnership with Kuwaiti-based logistics firm Agility. The announcement comes after Korek declined South Africa-based MTN’s offer as reported by MEED in December 2010.
FT has a 46 per cent share in the joint venture, while Agility holds 54 per cent.
Agility will contribute its existing convertible debt and inject an additional $50m in exchange for a 24 per cent indirect stake in Korek and a $100m four-year shareholder loan to the operator. FT will pay $245m for a 20 per cent indirect stake in Korek and will extend a $185m four-year share loan to Korek.
FT will have the opportunity to increase its indirect stake in Korek to 27 per cent in 2014, enabling the company to consolidate Korek in its accounts. If FT chooses to do this, it will then have the option of increasing its stake up to 39 per cent in 2014 and then to 51 per cent in 2016.
In a meeting with the Iraqi Communications and Media Commission, FT promised to create 2,500 direct jobs and 1,000 indirect jobs across the country.
Korek will pay off its licence fees ($1.25bn) and debts and expand its network and services with the proceeds.
“The acquisition of this stake in Korek Telecom is a new step in our policy of expansion outside Europe and contributes to our stated aim of doubling our revenues in Africa and the Middle East by 2015,” says Stephane Richard, chairman and chief executive officer of FT.
Korek is the smallest of the three Iraqi national operators with 3 million subscribers.