KT seeks to buy Maroc Telecom
By Kim Yoo-chul
Telecommunications giant KT said Wednesday that it has submitted a preliminary bid to buy a controlling stake in Maroc Telecom, Moroco’s biggest mobile carrier.
The Korean company’s biding came after France’s Vivendi announced it will sell its 53 percent stake in Maroc for about $7.3 billion.
KT spokeswoman said the bidding is non-binding, adding the company will make a final bid after watching moves by other parties showing interest in the Moroccan firm.
France Telecom, Qatar’s Qtel and Etisalat are other potential bidders for Vivendi’s stakes, said managers from investment banks in Seoul.
``We are interested in expanding our presence in Africa. Making a direct investment in a leading telecommunications firm in that continent is a good strategy for us to find new and attractive business chances. But KT won’t make a hasty decision on the Maroc deal because we’ve learned from the Telkom case,’’ said a senior KT executive by telephone.
KT aims to earn 4 trillion won overseas in 2015 to account for 10 percent of its entire revenue target of 40 trillion won for that year.
This is the second major attempt by KT in a few months after the company’s plan to buy a stake in South Africa’s Telkom was blocked by the government there. KT tried to buy 20 percent of Telkom in June but the South African government opposed the sale.
The executive said that forming a consortium is one possible option but nothing has been decided.
``If KT is serious about the Maroc deal then it can secure needed cash by using a corporate partnership program that KT already signed with the National Pension Service (NPS). The program will help KT get 1 trillion won in cash. KT can also fund over 1.5 trillion won by forming a consortium,’’ said one banking source by telephone.
If KT completes the deal, it will be the biggest overseas acquisition by a Korean company. Previously, Doosan Group invested $5.1 billion for the acquisition of Bobcat. Doosan raised $2.9 billion by forming a nine-member consortium and four investment companies including Mirae Asset provided $800 million.
KT is in the process of fine-tuning its strategies for its global businesses. The firm has achieved mixed results over its previous attempts to branch out overseas.
It recently sold Russia’s NTC for $346 million. KT bought the management rights of NTC in 1997. It is the second-biggest stakeholder of the state-run Mongolia Telecom (MT) after it bought a 40 percent stake in 1995. Since 1995, MT has tripled its net value.
Other than those two cases, KT hasn’t reported major achievements for overseas acquisitions.
According to banking sources, Maroc has been creating over 2 trillion won EBITDA, annually and its annual EBITDA margin was around 40 percent, making it possible for KT pay back interest without big financial burden.
EBITDA stands for earnings before interest, taxes, depreciation and amortization. The term is a measurement of a company’s operating cash flow based on data from the firm’s income statement.