Vodafone Group sells Vodafone Qatar stake to local venture partner

27 Feb 2018

Vodafone Group yesterday announced a deal to sell its stake in mobile and fibre network operator Vodafone Qatar to its Qatari joint venture partner, whilst continuing the Vodafone brand in the Middle Eastern country via a Partner Market agreement.

Under the deal, Qatar Foundation will acquire the UK telecoms giant’s 51% stake in the joint venture company – Vodafone & Qatar Foundation – that controls Vodafone Qatar for a total cash consideration of QAR1.350 billion (USD367 million), including QAR1.250 billion upfront and QAR100 million payable twelve months after completion, which is expected in the next three months. The transaction values Vodafone Qatar at an enterprise value of QAR6.502 billion.

Vodafone Group and Vodafone Qatar have entered into a Partner Market agreement with an initial term of five years (from the stake sale completion date), allowing the Qatari operator to continue using the Vodafone brand and tapping ‘expertise and other assets’ of the Group, a press release announced.

Furthermore, Vodafone Qatar’s original 20-year operating licence has been extended for an additional 40 years to 2068, Qatari newspaper The Peninsula reported. The move will help profitability by reducing licence amortisation cost annually from QAR403 million to approximately QAR100 million. Accumulated losses at Vodafone Qatar stand at QAR4.272 billion to date.

The Qatari firm also announced the appointment of new executive management, including current COO Sheikh Hamad bin Abdullah Al Thani taking over as CEO from Ian Gray in March. At a press conference, Gray said: ‘Regardless of shareholding … [Vodafone Qatar] will have the advantages of the scale of Vodafone and will be one of the first adopters of 5G network [technology]’, adding that CAPEX in 2018 is expected to be significantly higher compared to the previous year.

TeleGeography notes that 45% of Vodafone Qatar’s shares are held by Vodafone & Qatar Foundation (itself 51% owned by Vodafone Group via Vodafone Europe [giving it a 22.95% economic stake] and 49% by Qatar Foundation For Education, Science & Community Development [also owning a 5% direct stake, giving it an overall 27.05% interest]). Other shareholders include General Retirement & Social Insurance Authority Pension Fund (6.7%) and Military Pension Fund (5.2%), with the remainder (38.1%) in public float on the Qatar Stock Exchange (percentages correct at 31 December 2017).

Qatar, Vodafone Group, Vodafone Qatar