Vodafone exits Qatar, sells 51pc stake in JV for $370m

27/02/2018 05:51 AST

Leading British telecom company Vodafone has announced plans to sell its 51 per cent stake in the joint venture that controls Vodafone Qatar to the Qatar Foundation for QR1.35 billion ($370 million), capping an almost decade-long string of losses amounting to more than $1 billion.

The company said its brand would remain in Qatar as part of a partner market agreement signed with an initial term of five years. The transaction values Vodafone Qatar at an enterprise value of $1.78 billion.

Upon completion of the sale, which is expected by June, Vodafone Group will receive $343 million followed by the remaining $27.04 million a year after the transaction, it said.

Vodafone said this Qatar deal will help reduce the amortisation cost annually from QR403 million to QR100 million. The board believes this will make the company profitable for the foreseeable future, it stated.

Announcing this at the company's board meeting, the company said it is implementing a reduction in the share capital of the company from QR8.454 billion to QR4.227 billion by means of reducing the nominal value of the shares of the company from QR10 per share to QR5 per share in accordance with the articles of association of the company.

Vodafone Qatar plans to restructure its balance sheet to eliminate the QR4.27 billion ($1.18 billion) in accumulated losses, which it said was attributable to the "amortisation costs" of its licence to operate in Qatar.

It reached an agreement with the government to extend its telecommunications licence by 40 years to 2068.

To drive the company forward and with the above in mind, Rashid Al Naimi has been elected the managing director with immediate effect. As the CEO of Qatar Foundation Endowment, Rashid Fahad Al Naimi will be responsible for Qatar Foundation's investment portfolios.

He is also the residing chairman of Meeza and Mazaya Qatar, and a board member of Vodafone Qatar.

Ian Gray, Vodafone Qatar's current CEO and Board Director has decided to retire and will step down following the company's annual general assembly on March 19. He will be replaced by Sheikh Hamad bin Abdullah Al Thani, currently Vodafone Qatar's chief operating officer.

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