Etisalat sells 28% stake in Thuraya to Star Satellite

Telco says stake disposal will not have a material impact on company’s financials

Etisalat Group sold its 28.04 per cent stake in Thuraya to Star Satellite Communications Company, a special purpose vehicle (SPV) of Yahsat.

An SPV is a subsidiary of a company purely set up to isolate financial risk from its parent company.

Etisalat said on the Abu Dhabi Securities Exchange that the transaction will not have a material impact on the company’s financials.

Yahsat is a fixed satellite services provider and Thuraya is a mobile satellite services provider.

The closing of the transaction is subject to a number of conditions precedent including, among others, regulatory approvals and the purchase offer being accepted by Thuraya shareholders representing at least 75 per cent of all of the shares.

Andrea Faggiano, partner at Arthur D. Little Middle East, told Gulf News that etisalat Group seems to be active in rationalising its investment portfolio and selling off non-strategic stakes.

“It’s a focused action, with a strong rationale adopted by several other operators around the world,” he said.

The Abu Dhabi-based telecom operator reported a flat year-on-year profit of Dh2.1 billion in the first three months of the year while revenues grew 5 per cent year on year to Dh13.1 billion.

When asked whether the stake sale is due to the tough market, Faggiano said that etisalat Group has solid first-quarter financials, and yet 49 per cent earnings before interest, tax, depreciation and armotisation (Ebitda), which remains impressive for a geographically diversified operator.

The closing of the transaction is subject to a number of conditions precedent including, among others, regulatory approvals.