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Thu 24 Feb 2011 04:00 PM

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Etisalat in talks for law change over underpriced stock

State-owned telco pushing for foreign ownership of its shares, which it says are undervalued

Etisalat in talks for law change over underpriced stock
TELECOM TALKS: The UAEs Etisalat is in talks with the government to allow it to fall under commercial law

The UAE's Etisalat is in talks with the government to allow
it to fall under commercial law, allowing for foreign ownership of its shares
which it considers undervalued, a top official said on Thursday.

Chief Financial Officer Salem Al Sharhan said Etisalat,
which is 60 percent owned by the UAE government, wants to transition to a
company governed by commercial law and not the special law it was created and
operates under.

"It [the stock] is under priced," Sharhan told
reporters. "We are in discussions with the government but ultimately it is
their decision. The restriction is coming from that we are established
according to a special law.

"Once we move to commercial law ... then the government
will decide how much they will allow foreign ownership."

Shares in Etisalat, which is currently bidding for a
46-percent stake in Kuwait's Zain valued at around $12bn - rose 7 percent in
2010, outperforming Abu Dhabi's index ADI which dropped 1.5 percent.

The stock has gained 1.9 percent so far this year.

The shares closed 0.5 percent higher on the Abu Dhabi
bourse.

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