DUBAI, June 23 (Reuters) - Dubai Holding, the conglomerate owned by the ruler of Dubai, has hired Citigroup to advise on a potential sale of its remaining 26 percent stake in mobile telephone retailer Axiom Telecom, three sources aware of the plan said.
The stake is held by Dubai Holding unit Emirates International Telecommunications LLC (EIT), but the U.S. lender was hired by the holding company, which is taking the lead in the process, the sources said, speaking on condition of anonymity as the matter is not public.
An EIT spokesperson said: “Like any investment company, EIT is always evaluating exit options that are in line with its investment strategy.”
It added, “EIT continues to be committed to investing within the communications sector and to actively managing its portfolio companies to drive value creation.”
EIT did not elaborate, and Citigroup declined to comment.
A recovery in the real estate sector is aiding a revival of economic growth in Dubai after the emirate’s 2009-2010 corporate debt crisis, but it has yet to make much progress in selling some of its state-linked assets, the main means of repaying its debt pile.
Dubai Holding is among the matrix of firms which were badly hit by the crisis; many of its units have had to hold talks with banks to extend liabilities and restructure debt.
Sources have previously told Reuters that Dubai Holding was considering selling its remaining stake in Axiom, adding that a sale would likely raise about $300 million for the conglomerate.
Dubai-based Axiom, set up in 1997 by Faisal Al Bannai, employs over 1,500 people and has over 500 outlets across the United Arab Emirates, Saudi Arabia, Bahrain, Qatar, Oman, Kuwait, Britain and India, according to its website.
Axiom sold a 35 percent stake in itself to Qatar’s Mannai Corp for an undisclosed amount in 2011 after deciding against a share listing. EIT sold a 14 percent stake in Axiom at that time.
“There is a chance that Mannai may further increase their stake in Axiom and take a controlling stake. However, it’s a good business and there will be other interested parties who want to cash in on the retail boom in the region,” one banking source said.
A Mannai spokesman was not immediately available to comment.
EIT is seeking to sell its 35 percent stake in state-owned Tunisie Telecom, which it bought for $2.25 billion in 2006, the Tunisian government said on Friday.