WorldWide Tech & Science. Francisco De Jesús.
A partnership of France Telecom and Agility, a Kuwaiti logistics company, announced an agreement to acquire a 44 percent stake in Korek Telecom, the Iraqi mobile operator.
The two partners are forming a joint venture to acquire the Korek stake. France Telecom will hold a minority (46 percent) shareholding in the joint venture with the balance held by Agility.
The French operator will pay US$245 million for its 20 percent indirect stake in Korek, and will also extend a US$185 million, 4-year loan to the Iraqi operator.
Meanwhile, Agility will contribute existing convertible debt and inject an additional US$50 million for a 24 percent indirect stake in Korek.
The Iraqi operator is the country’s third largest in terms of subscribers but lags way behind larger rivals, Zain and Asiacell. Korek is currently expanding from its core market in the Kurdistan region of Iraq into the rest of the country and France Telecom says it will provide the “marketing, commercial and technical expertise” to assist.
Under the terms of the agreement, France Telecom and Agility have the option to buy an additional 7 percent of Korek in 2014, giving them 51 percent of the operator, with France Telecom also having the option to increase its stake in the holding company to 53 percent.
This will give it an indirect holding in Korek of 27 percent, and will also give it indirect control of the company, which means it can consolidate the Iraqi operator’s results in its accounts. It has been mooted for some months that France Telecom would take a stake in the Iraqi operator which is currently owned by founder Sirwan Mustafa, the nephew of the president of Kurdistan Massoud Barzani.