Riyadh: Saudi Telecom Co. offered a loan of about $160 million (Dh588 million) to a subsidiary that missed a repayment on $4.75 billion of debt last year, according to people familiar with the matter.
The funds would allow Otas, a special purpose vehicle formally known as Ojer Telekomunikasyon AS that owns 55 per cent of Turk Telekomunikasyon AS, to cover an interest payment that was due in September, the people said, asking not to be identified as the information is private. Otas missed a $290 million repayment — including principal — as a slump in the lira led to a decline in the dollar value of the dividends that it receives from Turk Telekom, a person familiar said in October.
Saudi Telecom indirectly owns a stake in Otas through Oger Telecom and is considering buying a direct stake to help resolve the debt issue, the people said. Lebanon’s Hariri family, which owns Oger Telecom through its Saudi Oger business unit, has started to sell assets to deal with mounting debt, agreeing to a deal to sell a 20 per cent stake in Jordan’s Arab Bank in December. Saudi Telecom owns the remaining 35 per cent in Oger.
“If the acquisition by STC moves forward, we think this would be a positive for Turk Telekom as it would be in the hands of a stronger shareholder,” Trieu Pham, a credit strategy analyst for emerging markets at MUFG Securities in London, wrote in emailed comments on Wednesday. “Moreover, we think that such an acquisition would avoid a change of control event.”
Turk Telekom shares rose 0.9 per cent to 5.55 liras in Istanbul on Wednesday, the highest since November 22.
A spokesman for Saudi Telecom declined to comment. Otas directed queries to Oger Telecom which declined to comment.
— Bloomberg
