Saudi Mobily in talks to buy stake in fixed line firm Atheeb

Reuters News
Posted: Jun 03, 2013 8:56 AM
Saudi Mobily in talks to buy stake in fixed line firm Atheeb

By Matt Smith

DUBAI (Reuters) - Saudi Arabia's No.2 mobile company Etihad Etisalat <7020.SE> (Mobily) is in talks to buy a stake in loss-making fixed-line operator Etihad Atheeb <7040.SE>, according to a statement on the kingdom's bourse.

The two firms have entered non-binding talks for a Mobily subsidiary to buy a stake in Atheeb, according to the statement, which sets a June 30 deadline to announce "relevant developments".

This did not state what size stake Mobily was seeking or who the potential sellers are.

Bahrain Telecommunications Co <BTEL.BH> (Batelco) owns 15 percent of Atheeb, Atheeb Trading Company holds 16.4 percent and Al Nahla Group has a 13.9 percent stake, with 49 percent of shares publicly traded.

Mobily, a subsidiary of the United Arab Emirates' Etisalat <ETEL.AD> does not have a fixed-line licence and acquired data provider Bayanat Al-Oula for 1.5 billion riyals ($399.98 million) in 2008 to offer fixed-line Internet services.

It signed a Memorandum of Understanding with Atheeb, which operates under the brand name Go, in December to offer fixed-line calls.

Mobily's chief executive Khalid al-Kaf told Reuters in January that this would soon become a formal partnership, with his company becoming a re-seller for Atheeb's estimated 2 million lines.

Atheeb, which a made a net loss of 274.1 million riyals in the financial year ending March 31.

The firm cut its capital to 400 million riyals from 1 billion riyals in 2011 to offset some of its accumulated losses, as per Saudi bourse rules. It then completed a 1.18 billion riyals rights issue the following year.

Mobily, Batelco and Atheeb were not immediately available for comment.

(Reporting by Matt Smith; Editing by Louise Heavens)