DUBAI: Saudi Arabia’s No.2 mobile company Etihad Etisalat (Mobily) is in talks to buy a stake in loss-making fixed-line operator Etihad Atheeb, according to a statement on the kingdom’s bourse.
The two firms have entered non-binding talks for a Mobily subsidiary to buy a stake in Atheeb, according to the statement, which sets a June 30 deadline to announce “relevant developments”.
This did not state what size stake Mobily was seeking or who the potential sellers are.
Bahrain Telecommunications Co (Batelco) owns 15 percent of Atheeb, Atheeb Trading Company holds 16.4 percent and Al Nahla Group has a 13.9 percent stake, with 49 percent of shares publicly traded.
Mobily, a subsidiary of the United Arab Emirates’ Etisalat does not have a fixed-line licence and acquired data provider Bayanat Al Oula for SR1.5bn ($399.98m) in 2008 to offer fixed-line Internet services.
It signed a memorandum of understanding with Atheeb, which operates under the brand name Go, in December to offer fixed-line calls.
Mobily’s chief executive Khalid Al Kaf said in January that this would soon become a formal partnership, with his company becoming a re-seller for Atheeb’s estimated two million lines.
Atheeb, which a made a net loss of 274.1 million riyals in the financial year ending March 31.
The firm cut its capital to SR400m from SR1bn in 2011 to offset some of its accumulated losses, as per Saudi bourse rules. It then completed a SR1.18bn rights issue the following year.
Mobily, Batelco and Atheeb were not immediately available for comment.
Reuters
