Etisalat finalising bond sale programme

The UAE's Emirates Telecommunications Corp (Etisalat) aims to sell bonds, possibly Islamic, this year or by early 2010, to help finance overseas expansion, its chief financial officer said on Wednesday.

Etisalat, which operates in 18 countries, including Egypt and India, is one of a number of Gulf Arab telecom operators that have expanded overseas after losing their monopolies at home.

Speaking to Reuters, Salem al-Sharhan said the firm was looking to finalise a medium-term note programme targeting international markets by November.

"So far, the plan is to issue $500m by the end of the year ... early next year," he said, adding exact values had yet to be decided.

"It will be for international expansion."

Etisalat has long been on the acquisition prowl and said last November it had more than $3bn in cash on hand to fund purchases in 2009.

It is currently awaiting the outcome of bids for a fixed and mobile phone licence in OPEC member Libya and an offer for Millicom in Sri Lanka, and has said it remains interested in entering Morocco's telecom sector.

The bond programme would enable the telecommunication's firm to sell both Islamic and conventional bonds, Sharhan said, adding no banks had yet been mandated for the sale.

Shares of Etisalat were steady at AED12.50 at 0722 GMT.

Al Mal Capital maintained its "outperform" rating on Etisalat stock on September 30, with a price target of AED17.11.

The broker said Etisalat's third-quarter results may be hurt by a fall in size of the population, as job losses force many to leave the country, and increased competition from rival du, but the worst may be behind the operator.

An average of four analysts surveyed by Reuters earlier this month estimated the firm's third-quarter profit to be about AED2.27bn ($618 million), up 6.6 percent on the year earlier period.

State and corporate issuers in the world's largest oil exporting region have raised almost $20bn by issuing bonds over the last six months.

Many are eyeing further sales as demand rises for high-rate emerging market debt and governments look to boost infrastructure spending to shelter the region's economy from the global financial crisis.

The Etislat bonds are the latest in a flurry of Abu Dhabi issues with the Tourism Development & Investment Co pricing $1bn of Islamic bonds on Tuesday.

Other issues include the National Bank of Abu Dhabi and Abu Dhabi National Energy Co, which in September raised $850m and $1.5bn, respectively, for conventional bonds. (Reuters)

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