Telecom Egypt board of directors has approved the acquisition of 50% of its subsidiary Egyptian International Submarine Cable Company (EISCC) at a value of USD 15 million.
EISCC had recently completed the acquisition of Middle East and North Africa Submarine Cable ( MENA Cable ) from Orascom Investment Holding at a total enterprise value of USD 90 million.
Earlier in August, Telecom Egypt had also announced the signature of a Memorandum of Understanding (MoU) with Bharti Airtel , according to which Telecom Egypt will bundle assets of its international submarine network with assets on MENA Cable.
The deal, which is expected to be concluded soon, will enable Telecom Egypt to recover its entire investment in MENA Cable.
Telecom Egypt believes that the decision to acquire the remainder of EISCC has multiple financial advantages including:
– Full consolidation of MENA Cable profitability from the Bharti Airtel transaction; – Immediate savings of cUSD 10 million as a result of the new structure; – Total recognition of recurring revenue over the life time of the cable (min. of 15 years).
Ahmed El Beheiry, managing director and CEO, said: “Management has worked tirelessly since the beginning of the year to secure the revenue of its international submarine cable network and had announced to investors that it foresees a short-term return on the acquisition of MENA Cable. We have since reported several milestones in our plan including the conclusion of the acquisition of MENA Cable as well as the signing of a MOU to recover our investment. The announcement is very important as it will enable the full consolidation of the asset and the expected revenue over its lifetime. The completion of transaction marks the second fully owned submarine cable by Telecom Egypt in addition to TE North.”