Tunisie Telecom eyed by LIA, Turkcell and Korean group; CDC willing to co-invest in pre-IPO deal UPDATE

By bne IntelliNews September 1, 2013

UPDATE: 19/09/2013 - At the Workshop Ambrosetti Forum held in Cernobbio in early September, APAX Southern Europe and Turkey head Giancarlo Aliberti said that the UK-based private equity firm is now looking at Tunisie Telecom.

He said that APAX had once looked at entering into Tunisia’s largest operator Tunisiana with Orascom Telecom Holding (OTH) Executive Chairman Naguib Sawaris. In 2010, OTH sold its 50% stake in Tunisiana to Qatar Telecom for USD 1.2bn.

Giuseppe Recchi, ENI chairman and Blackstone International Advisory board member, also told Capitol Intelligence in Cernobbio that the US fund is also looking at a possible investment in Tunisie Telecom. Davis Selected Advisors, the US investment group that acquired a stake in Orascom Construction, has also been contacted regarding the 35% stake sale.

Telecom Italia Executive Chairman Franco Bernabe told Capitol Intelligence/IntelliNews in Cernobbio that the company is very open to managing the country’s second operator and that it is already doing similar work for Libya’s main mobile phone operator AlMadar.

Financial sources said that Washington, DC-based Carlyle would be an ideal financial partner for Tunisie Telecom as it head of Southern Europe, Marco deBenedetti once headed Telecom Italia’s mobile phone operator TIM.

Following the publication of our original report, Korea’s KT Corporation confirmed on Septmber 17, 2013 that it is looking at acquiring a stake in Tunisie Telecom and has hired Societe Generale as a buyside advisor.

This is an update to our story (below) originally published on September 2, 2013

TUNIS/TRIPOLI (CI/IntelliNews MENA) -- Tunisie Telecom, Tunisia’s second mobile phone operator, is attracting interest from Libya’s sovereign wealth fund Libyan Investment Authority (LIA), Turkey’s Turkcell and a Korean based operator, financial sources with direct knowledge said.

Dubai Holding’s telecommunications subsidiary Emirates International Telecommunications LLC (EIT) has mandated Credit Suisse to sell its 35% in the company it purchased in 2005 for USD 2.25bn.

Jamel Bel Haj, the general manager of Tunisia’s state pension fund Caisse des Depots et Consignations (CDC), said the CDC is currently advising the government how best to monetize its 65% stake in Tunisie Telecom. Bel Haj said the CDC is currently using Tunisia’s foremost corporate attorney Nourddine Ferchiou as its overall advisor.

In an interview with Capitol Intelligence/IntelliNews in Tunis, Bel Haj said that Dubai Holding or whoever purchases Dubai Holding’s stake has the option to acquire an additional 16% stake from the Tunisian government and thus control 51% of Tunisie Telecom.

Bel Haj said that EIT’s 35% stake has been valued at USD 700m and that a 51% stake would be worth a minimum of USD 1bn.

Deutsche Bank has already held meetings in Tunis with Tunisie Telecom and CDC regarding the possible purchase of the stake by LIA affiliate company LAP GreenN, Bel Haj said.

However, financial sources said LIA is not willing to acquire the entire stake on its own and would prefer to acquire EIT alongside another investor and/or strategic partner.

CDC is willing to be a co-investor in Tunisie Telecom alongside LIA or another investor as long as there was a clear exit strategy for the CDC such as an initial public offering (IPO), Bel Haj said.

The Tunisie Telecom sale offers an excellent opportunity for a US or European based private equity group such as Washington, DC-based Carlyle or London’s Apax to become a co-investor alongside the LIA and the CDC, a London-based TMT banker said.

The US government’s Overseas Private Investment Corporation (OPIC) is open to offering up USD 250m in project finance or political risk guarantee for any US based investor willing to go into Tunisie Telecom, a source close to OPIC said.

Multilaterals such as Tunis-based African Development Bank, Word Bank’s International Finance Corporation (IFC), and the European Bank for Reconstruction and Development would all be willing to help facilitate a transaction, bankers here said.

A Tunisian financial source said that Telecom Italia, which is currently working with Libyan mobile operator Almadar and Libyana, has already been approached as a potential manager for Tunisie Telecom.

By PK Semler Tunis and Tripoli for IntelliNews and CI MENA, a news service of the Capitol Intelligence Group, INC.

For further information, subscribers may contact PK Semler (+1202-549-3399)  pks@capitolintelgroup.com or analyst@intellinews.com

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