Telecom Egypt completes $90m deal to buy MENA cable from Orascom
Telecom Egypt has completed its $90 million acquisition of Orascom’s subsea cable linking Italy with the Middle East and India.
The company announced theproposed deal in May to buy the Middle East and North Africa (MENA) cable from Orascom Investment Holding, and said yesterday that the purchase had been concluded.
Ahmed El Beheiry, Telecom Egypt’s managing director and CEO, commented: “I am very pleased with the closing of this transaction that will add MENA cable to our international cables network in line with the company’s strategy to expand its international connectivity to enable Egypt’s vision of becoming a digital route.”
He explained: “The decision to acquire MENA Cable is a result of our vision to achieve a short-term return from this transaction capitalising on the growing data demand from India.”
The cable runs from Sicily in the west to Mumbai in the east, via a number of connections in the Mediterranean, the Red Sea and the Gulf.
The company added that the total enterprise value was $90 million but that $40 million was the equity value and the other $50 million was debt.
In August Telecom Egypt signed an agreement with Bharti Airtel for an indefeasible right of use (IRU) on the MENA cable as well as on TE North. Airtel also got large capacities on the SEA-ME-WE 5 and AAE1 as part of the same agreement.
Telecom Egypt said that Egyptian investment bank EFG Hermes acted as its brokerage company for executing the transaction.
El Beheiry said yesterday: “We expect to formalise the partnership with Airtel into an agreement soon, which will enable Telecom Egypt to recover all of its investment in MENA Cable.”