The move is thought to be designed to increase the company’s focus on its core Caribbean assets, and the deal, agreed today, sees Batelco take a 13.75% indirect stake in Monaco Telecom.
CWC will divest its other disparate operations across the Maldives, the Seychelles and the Channel Islands. The sale further includes a 25% stake in Compagnie Monegasque de Communication (CMC), CWC’s holding company. CMC holds a 55% stake in Monaco Telecom.
Batelco, however, does have a one-year option to buy the remaining 75% of CMC, which will enable CWC to sell its controlling stake in Monaco Telecom for $345 million, upon regulatory approval.
“The sale is very much in line with our strategy and represents a very attractive multiple,” said Tim Pennington, CWC chief financial officer. “This represents the evolution of CWC in a more simplified telecoms group.”
Through the capital injection, CWC will cut its net debt, which stood at $1.6 billion at the end of September, and market watchers predict the company will further pursue acquisitions in the Caribbean.
CWC is also in talks to divest its controlling stake in Macau’s largest operator for up to $800 million to CITIC Telecom International, a stake-owned conglomerate.
“Armed with strong balance sheets, emerging carriers such as Batelco are seeking increased scale at a time when many of the established Western carriers are selling assets to focus on core regional businesses, sustain dividends and fund broadband network upgrades (whether FTTx or LTE). We expect to see more strategic deals like this in the sector over the next year,” said Toby Pearce, Head of EMEA Media & Telecommunications at Houlihan Lokey’s London office.
Houlihan Lokey initiated and is acting as lead financial advisor to Batelco on the transaction along with Citigroup.
