KT Corp of South Korea has formalized its withdrawal from the bidding for the 53% shareholdings owned by VIvendi in Maroc Telecom headquartered in Morocco. This though does not preclude other investment options for the telecommunications firm.
Previously, a letter of intent was submitted by KT Corp to purchase the stake for about Eur5.5 billion or US$7.2 billion. KT has now decided to withdraw the letter of intent because 'we could not help but be concerned about the discrepancy between KT's own valuation and that of the market and sell-side.' This was confirmed through an email sent by the firm to its financial advisers obtained by Reuters.
Another major issue is debt servicing associated with the bid as there was a lack of resolution on the 'tax dispute' as well as 'unforeseen tax issues in the future.'
WIth this development, Ooredoo of Qatar, formerly known as Qtel and Etisalat of UAE remain as the contenders for Maroc Telecom. The sale is important as Vivendi management is now divesting its telecommunications interests and reduce overall debt to focus on its music and pay-TV businesses.
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