Global Arab Network | Tunisia: Fitch Places Orascom Telecom Tunisie (Tunisiana) on RWP Following Qatar Offer

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Tunisia: Fitch Places Orascom Telecom Tunisie (Tunisiana) on RWP Following Qatar Offer

Global Arab Network - - George Haddad

Monday, 22 November 2010 15:20

Orascom_Telecom_Tunisie_Tunisiana_Tunisia

Tunisia (Tunis) - Fitch Ratings has placed Orascom Telecom Tunisie's (OTT) 'BBB-' Long-term foreign and local currency Issuer Default Ratings (IDR) and National Long-term rating of 'A+ (tun)' on Rating Watch Positive (RWP).

The rating actions follow Qatar Telecom's (QTel; 'A+'/Stable) announcement that it has signed a share purchase agreement with Orascom to acquire, together with a local consortium led by Princesse Holding, its 50% stake in OTT for USD1.2 billion. The purchase will be executed via QTel's Wataniya subsidiary, which already owns 50% of OTT. The closing of this offer is subject to the approval of the relevant regulatory approvals, which is expected in early January 2011.

Prior to this announcement, OTT's ratings were based on the standalone performance and financial profile of its Tunisian-branded mobile business. The RWP reflects the agency's opinion that after the acquisition is closed (expected early in 2011), OTT's ratings will benefit from some linkage uplift with its new higher rated parent. Qtel has an established track record of supporting its key subsidiaries (e.g. Indosat in Indonesia) and Fitch expects to resolve the RWP when further details of the ownership and funding structure and potential benefits with Princesse Holding become clear.

The 'BBB-' IDR reflects OTT's robust free cash flow (FCF) generation and strong credit metrics compared with its peers in MENA, despite the maturing market and intensified competition of a third new mobile operator, run by the Divona/Orange-France Telecom consortium, from H210.

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