Telecom Egypt (TE) [ETEL.CA] announced that its 50% owned subsidiary, Egyptian International Submarine Cables Company (EISCC), has signed a sale and purchase agreement (SPA) with Orascom Telecom Media and Technology (OTMT) [OTMT.CA] for the acquisition of OTMT’s stake in Middle East and North Africa Submarine Cable (MENA Cables) for a total value of USD90mn, according to a company disclosure. The transaction should be concluded in 60 days, after the fulfilment of all the conditions’ precedents. This comes after TE announced on 10 May the approval of its BoD of the decision to acquire MENA Cables using a shareholder loan from TE. EISCC’s financial advisers included KPMG and First Capital Financial Advisory, while Al Tamimi & Co and ALC Law Office are the legal advisers and Metel ICT is the technical adviser. The decision to acquire MENA cables comes in line with TE's strategy to: i) achieve short-term return from investment; and ii) preserve the revenue stream of the submarine cable systems. 

OTMT: EGP0.84 as of 20 May 2018, Rating: Sell, TP: EGP0.53/share, MCap: USD247mn, OTMT EY/OTMT.CA