C&W looks to exit Batelco

23 Feb 2006

UK carrier Cable & Wireless (C&W) is in talks to sell its stake in Bahrain Telecom (Batelco) as part of a strategy to restructure its operations and focus on its UK and Caribbean businesses. C&W said yesterday that the talks regarding the sale of its 20% interest in Batelco were in the preliminary stages and that there was no certainty of a deal. It did not reveal the identities of the participants involved nor indicate a price for the stake, although the shares were valued at around USD628 million last week. C&W views the Middle Eastern operator as a non-strategic asset and is hoping to capitalise on recent high valuations for telecoms assets in the region on the back of high oil prices. C&W has exited several overseas operations in recent years, notably in the US and Japan. A report in the Times newspaper said that C&W could use part of the proceeds to plug its pension deficit, estimated at around GBP200 million (USD350 million) at the end of September 2005.

Batelco is owned by the Government of Bahrain (36.6%) and Cable & Wireless (20%). The remainder is owned by quasi-governmental institutions, leading financial and commercial organisations, and Bahraini and GCC citizens. In May 2004 the government revealed plans to sell its entire stake in Batelco, but this has so far not proceeded with the plan.