| DUBAI/LONDON, April 17
DUBAI/LONDON, April 17 Abu Dhabi telecom group
Etisalat is set to sign an $8 billion loan facility
next week with as many as 16 banks to help fund its Maroc
Telecom stake bid, bankers said.
The availability of credit highlights demand for
high-quality Gulf names in the loan market, bankers said, while
also advancing Etisalat's attempts to secure an asset whose sale
is seen as a vital part of a restructuring at French group
Vivendi, owner of the Maroc Telecom stake.
Vivendi is looking to offload its 53 percent stake in the
Moroccan company to help reduce its debts, with potential
bidders requiring more cash than the stake's $6 billion market
value as minority shareholders need to be offered the option of
being bought out as well.
Binding bids for the stake are due on April 22, with proof
of being able to fund a buy a key part. The Etisalat facility is
earmarked for signing by April 25, a Gulf-based banker said.
A deal is crucial for Vivendi, whose management is due to
face shareholders at an April 30 meeting with little to show so
far for a year of efforts to reduce exposure to telecoms, focus
more on media and cut debt.
The French group failed in attempts to sell video game unit
Activision Blizzard and Brazil telecom unit GVT.
Pulling off a Maroc Telecom sale will decide the next move in
its strategic overhaul.
Etisalat is in a straight fight with Qatar's Ooredoo
, formerly Qatar Telecom, for the stake, after South
Korea's KT Corp dropped out of the running, sources
told Reuters on Monday.
Etisalat declined to comment when contacted by Reuters.
PLENTY OF DESIRE
For its financing, Etisalat has already secured the backing
of 12 banks and up to four more could join before the three-part
$8 billion loan signs next week, banking sources said, speaking
on condition of anonymity as the information is private.
"There is plenty of desire to lend to top-tier credits and
the liquidity is out there, so if you have a decent name and can
promise auxiliary fee-generating business then there will be
good demand from banks," said one London-based banker.
Half of Etisalat's fundraising will come in the form of a
six-month bridge loan, which will be refinanced later by a bond
issue, two separate banking sources said.
The bridge loan - which can be extended by a further six
months to allow more time for the bond issue to take place -
will pay 45 basis points over the relevant benchmark rate for
the first six months, stepping up to 75 bps if the extension is
The remaining $4 billion is split equally between a
three-year "bullet" loan, meaning it will be repaid at the end
of the loan's life, and a five-year amortising facility, with
repayments of the loan and its interest paid at scheduled times
during the deal's duration, the two sources said.
Including both the interest rate and fees, the three-year
part pays just below 100 bps, with the five-year tranche paying
in the low 100s.
Banks can commit to the transaction in either dollars or
euros, with the $8 billion total amount to be split equally
between the lenders who sign up to the deal.
Its Maroc Telecom bid is Etisalat's first public approach to
a foreign company since a $12 billion bid for a controlling
stake in Kuwait's Zain failed two years ago.
Ooredoo is also speaking to banks about securing loan
financing for its bid and some of the lenders who are backing
Etisalat's loan are also present on the Qatari firm's
fundraising, the banking sources said.
(Additional reporting by Matt Smith; Editing by David Holmes)