Dubai: Etisalat Nigeria, the telco 40 per cent owned by UAE-based Emirates Telecommunications Company (etisalat), is committed to spending $1 billion on its telecoms infrastructure over the next two years, even while it remains at loggerheads with the local regulator over a fine related to poor quality of service, its chief executive said.
“We have invested $2 billion since we entered the market in Nigeria over the past four years, and we are investing another $500 million in infrastructure this year,” Steven Evans told Zawya Dow Jones by telephone on Thursday. “We are going to invest another $500 million next year.”
Earlier this month, Nigeria’s telecoms watchdog, citing the poor service quality of operators, handed down fines to etisalat Nigeria, India’s Bharti Airtel, local operator Globacom and South Africa’s MTN.
Evans said etisalat Nigeria will consult with shareholders over its next course of action after being slapped with a $2.25 million fine. A meeting between the country’s operators in the telecom watchdog on Wednesday proved unfruitful.
“It’s very important for our shareholders, who are investing this money, to feel that the regime as far as quality of services, is very clear and very well documented. Taking into account the challenges we face due to lack of power,” he said.
Besides the UAE’s etisalat, the company’s other major shareholder is Mubadala, an Abu Dhabi government owned investment fund, who holds a 30 per cent stake, said Evans. The rest of the company is controlled by Nigerian investors.
Nigeria’a Communications Commission is insistent that the operators pay the fines, spokesman Reuben Muoka told Zawya Dow Jones, with a penalty payment of 2.5 million Naira ($15,600) added for everyday the fine remains unsettled. Etisalat’s African operations, of which Nigeria forms a part of, contributed 678 million UAE dirhams ($184.6 million) to the company’s overall revenue of 8.2 billion UAE dirhams ($2.2 billion) in the first quarter of 2012.
Dubai Financial Market
Dubai Financial Market fell to the lowest level in two weeks as investors bet second-quarter profit of the only publicly traded Arab stock market may drop after trading volumes slumped.
The shares retreated 1.6 per cent to 94.5 fils, the lowest since May 16, at the 2 pm close in the emirate, extending their retreat this month to 16.4 per cent. The benchmark DFM General Index rose 0.1 per cent, trimming its drop this month to 9.8 per cent.
Trading volumes have dropped in Dubai as Europe’s debt crisis reduced investor appetite for riskier assets and oil prices tumbled 16 per cent this month. About 159 million shares have been traded, on average, on the exchange so far in the second quarter, down from an average of 274 million in the first three months of the year.
The Dubai Financial Market “stock is a proxy for the market,” said Samer Darwiche, a Dubai-based analyst at Gulfmena Investments Limited. “Lower traded volume of the exchange means that second-quarter earnings will be lower than the strong first-quarter figures.”
Saudi Oger Limited, a construction, telecommunications and utility company, hired Deutsche Bank AG and Qatar National Bank SAQ to arrange a $1.3 billion five-year loan, two bankers familiar with the matter said.
Saudi Oger is also in talks with other banks that may want to participate in the loan, the bankers said, declining to be identified because the matter is private. The company plans to complete the deal in the first half of the year, they said.
Credit Agricole SA, France’s second-largest bank by assets, moved its regional headquarters to Dubai from Bahrain, three bankers familiar with the matter said.
The bank relocated its Bahrain-based employees to the Dubai International Financial Centre, leaving one employee in the island-state to head a representative office, the bankers said, declining to be identified because the matter is private.
Mobile Telecommunications Company of Saudi Arabia, known as Zain Saudi, hired four banks for a five-year $2.5 billion loan to refinance its Islamic facility that matures in July, according to two bankers familiar with the matter.
The company, 25 per cent-owned by Mobile Telecommunications Company of Kuwait, mandated Al Rajhi Bank, Banque Saudi Fransi, Arab National Bank and Standard Chartered for the loan, the bankers said.
Zain Saudi will use the loan to refinance its existing $2.5 loan that matures on July 27, the bankers said.
Investors approved a six-month extension of the loan until July in January. Zain Saudi got the $2.5 billion Murabaha loan from eight banks in August 2009 to finance the company’s network expansion.
The Middle East’s leading investment bank is tangled up in Egyptian corruption allegations involving two sons of the deposed president Hosni Mubarak, Egypt’s state media reported on Wednesday.
Jamal and Alaa Mubarak, as well as the two chief executive officers and a former CEO of the Cairo-based investment bank EFG-Hermes, are being charged with corrupt stock exchange dealings worth more than $400 million in connection with the 2007 sale of Al Watany Bank of Egypt, state media said. Four others were also indicted.
Perceptions of corrupt backroom dealings that merged private and public interests by the Mubarak clan and its cronies fuelled the widespread anger that led to a popular revolt and the end of Mubarak’s rule last year.
Alaa and Gamal, the 48-year-old who was Mubarak’s heir apparent, already face corruption charges alongside their father. A verdict in that case is scheduled for Saturday.
The indictments of EFG-Hermes CEOs Yasser Al Malawany and Hassan Heikal, as well as former CEO Amr Al Kady, are a blow for the 28-year-old investment bank, which is reeling from the turmoil of the Arab uprisings.