TE credit rating reaffirmed

20 Nov 2006 13:57

Telecom Egypt S.A.E20 November 2006 MERIS (Middle East Rating & Investors' Service) affirms the senior unsecured debt at "AA" with a "Stable" Outlook of Telecom Egypt following its underlying of additional bank debts amounting to EGP 4.525 bn Cairo, 20th November, 2006: Telecom Egypt (TE) (Ticker: ETEL.CA; TEEG.LN), todayannounced the official statement of Middle East Rating & Investors' Service(MERIS) that it has affirmed the senior unsecured debt "AA" National ScaleRating of Telecom Egypt Company (TE). The rating outlook remained "Stable" forboth the entity and the instrument. An "AA" grade denotes very strong creditworthiness and a low likelihood ofcredit loss relative to other domestic issuers. The (+/-) signs denote relativestatus within each rating category. The attached stable outlook assumes that thecompany will be able to sustain the current business and financial profile inthe medium term. The rating announcement follows the company's raising of its bank debts, with anamount of EGP 4.525 bn, to partially finance the acquisition of an additional23.47% stake in Vodafone Egypt (VFE). The total value of the deal was EGP 5.63bn financed through a mix of internal and external resources. In a later action,Vodafone Group launched a tender offer for an additional 4.9% of VFE, part ofwhich will be sourced from TE (between 3.97% to 4.69%). If successful in theabove-mentioned tender offer, TE is anticipated to own 45% of VFE, whileVodafone Group will account for the remaining 55%. In the meantime, the lattertwo companies have entered into a strategic partnership, the most importantaspect of which is that TE will remain the sole supplier for the internationalgateway service to VFE, especially after liberalizing the international servicein Egypt. VFE will also extend its distribution channels through TE's outlets.Moreover, the two parties will co-operate together to implement new jointproducts. It is worth mentioning that this action was taken as part of the company'sstrategy to increase its exposure to the fast growing mobile sector in Egypt,following its unsuccessful bid for the third mobile license. MERIS believes thatthe above mentioned undertaking is considered in line with TE's overallstrategy, and is anticipated to have a positive impact on the company's businessoperation in the long term. - Ends - For further information: Investor Relations Contacts Tarek Tantawy, CFA Director of Investment, Treasury & Investor Relations Telephone: +202 5788111 Fax: +202 5789314 Eman Anis Investor Relations Manager Telephone: +202 5788787 Fax: +202 5789314 E-mail: investor.relations@telecomegypt.com.eg Notes to Editors: About Telecom Egypt Telecom Egypt (TE), Egypt's incumbent telecommunications operator, started itsoperations in 1854 with the first telegraph line in Egypt. Then it wascorporatized in 1998 to replace the former Arab Republic of Egypt NationalTelecommunication Organization (ARENTO). The Company is the largest provider offixed-line services in the Middle East and Africa with 10.7 million subscribersas at the end of September 2006 representing a teledensity of 14.9 percent. TE provides retail telecommunication services including access, local, longdistance and international voice, Internet and data, and other services. Thecompany also provides wholesale services including bandwidth capacity leasing toISPs, and national and international interconnection services. Telecom Egypt'sservices also include the provision of narrowband and broadband internet accessthrough its subsidiary TE Data. TE Data has active operations in Egypt andJordan. TE currently participates in the mobile segment in Egypt by providing mobileinterconnectivity through its current, increased 48.97% holding in VodafoneEgypt, one of the two existing Egyptian mobile operators. TE's shares and GDRs (Ticker: ETEL.CA; TEEG.LN) are traded on the Cairo andAlexandria Stock Exchanges and the London Stock Exchange. This information is provided by RNS The company news service from the London Stock Exchange