ABU DHABI, July 25 (Reuters) - Etisalat, the
United Arab Emirates No.1 telco, may raise its holding in Saudi
Arabia affiliate Mobily, the firm's chief executive
said on Wednesday, in what could give a major boost to its
bottom line if it took a majority stake.
The former monopoly is also undertaking a review of all its
operations across the 17 countries in which it operates, Ahmad
Julfar told Reuters, as it seeks to boost returns to
shareholders following a multibillion dollar foreign expansion
over the past decade that has so far added little to the bottom
This overhaul may include selling some of its African
subsidiary Atlantique Telecom units, but Etisalat has put on
hold plans to offload its 13 percent stake in Indonesia's XL
Axiata, Julfar said.
He also said the company would decide by the year end
whether to take an impairment charge on affiliate Pakistan
Telecommunication (PTCL), for which it originally paid
$2.6 bln for a 26 pct stake but is now worth about $150 million
according to market value on Karachi SE.
At present Etisalat does not fully consolidate Mobily's
earnings because it owns only a 27-28 percent stake in Saudi's
Mobily reported a 22 percent rise in second-quarter profit
to 1.42 billion riyals ($379 million) last week, while its 2011
annual profit was 5.08 billion riyals. Etisalat made an annual
profit of 5.8 billion dirhams ($1.58 billion) last year.
Julfar said Etisalat may also raise its stakes in other
affiliates that operate in high growth, high population markets
such as Nigeria and Pakistan.
"We have less than 50 percent (stakes) in Saudi, Nigeria and
Pakistan," said Julfar.
"(We) will be working to increase value for our shareholders
as well as contributing to the social and economic development
of those countries. If increasing our stake will address those
three things, then definitely we will be pursuing increasing our
stakes in those three markets.
"We are studying that option for Saudi Arabia."
Mobily has a market value of $12.3 billion, according to
Reuters data, while analysts say Saudi bourse rules do not
prevent a foreign company taking majority control of a locally
($1=3.6730 UAE dirhams)
(Editing by Mike Nesbit)