France Telecom, Agility buy 44% stake in Iraq firm

France Telecom has teamed up with Kuwait logistics company Agility to buy a 44 percent stake in Iraq's mobile telephone operator Korek Telecom as part of the French group's strategy to expand its presence in emerging markets, reported Dow Jones Newswires.


France Telecom will pay US$245 million for a 20 percent indirect stake in Korek Telecom, the French company.


Additionally, France Telecom will grant Korek Telecom a shareholder's four-year loan of $185 million, the statement said.
Agility will own a 24 percent indirect stake in Korek Telecom and will bring an undisclosed amount of convertible debt, $50 million in cash and a four-year shareholder's loan of $100 million.


Korek Telecom will use the proceeds to reduce its debt, pay for its licence and to improve networks and service.


France Telecom and Agility will set up a joint venture to take over the stake in Korek. France Telecom will own 46 percent of the joint venture and Agility will own the remaining 54 percent.


The French company will have an option to boost its stake in Korek to 27 percent in 2014 and get an indirect majority in the Iraqi company. Agility will have the option to sell part of its stake to France Telecom.


The Iraqi market is attractive because of the low penetration rate of mobile telephones compared with other countries in the region, France Telecom said.


Korek Telecom is based in Erbil in Iraqi Kurdistan, and is one of the three national mobile telephone operator in Iraq. It has three million customers.
(Source:http://www.cargonewsasia.com)