Etisalat eyes buys with $3 billion war chest

DUBAI (Reuters) - Emirates Telecommunications Corp ETEL.AD (Etisalat) is eyeing acquisitions as it seeks to benefit from falling prices in a financial crisis, potentially using its $3 billion in cash, a senior official said on Sunday.

Like other Gulf Arab telecom firms, Etisalat has been snapping up assets worth billions of dollars in populous countries such as Egypt and Pakistan.

When asked about the cash position of Etisalat to finance possible acquisitions, Ahmad Julfar said: "We have over $3 billion."

"We are watching what's happening in the markets. We are not holding back but waiting to see what will happen. We believe there will be a lot of opportunities in 2009," he told reporters on the sidelines of a conference in Dubai.

"Everybody admits we have a major crisis...nobody is immune from this crisis, all sectors and economies will be affected in one way or the other," Julfar said earlier at a panel discussion.

"Out of this crisis, great opportunities will come for operators with a very good financial position for mergers and acquisitions."

Kuwait's Mobile Telecommunications Co (ZAIN.KW) (Zain) said earlier this month it plans to make four to five acquisitions worth up to $4 billion before 2010 to take advantage of declining asset prices due to the global credit crunch.

Julfar said Etisalat is focusing on the region, declining to be more specific.

Etisalat has invested $11 billion in 16 countries so far, Julfar said at the panel discussion.

"We need to focus during this time to create value in these markets. Always the telecom sector is the last and least affected during a crisis," Julfar said naming Egypt, Saudi Arabia, the UAE and India.

Etisalat's head of international investments Jamal al-Jarwan told Reuters in September the firm was in final-stage talks to buy a majority stake worth up to $1 billion in a Middle East telecoms operator this year.

The company's shares were down 3.85 percent at 0854 GMT but are down 32.29 percent this year to last week's close, outperforming Abu Dhabi's main index ETEL.AD, which has declined 39.25 percent.

(Reporting by Daliah Merzaban; writing by Ola Galal; Editing by Thomas Atkins and Hans Peters)