Vodafone to sell its stake in the country to Qatar Foundation for €301m, name to stay

Vodafone, which partnered with Qatar Foundation to enter the country’s market as only its second mobile telephone provider, is set to exit soon.

Vodafone has confirmed it will sell its stake in Vodafone Qatar to its joint venture partner, the Qatar Foundation, for €301m but keep its red brand present in the country under a future partnership deal, reported Reuters.

Qatar Foundation will acquire Vodafone’s stake for a total cash consideration of QR1,350m (€301m), with QR1,250m (€279m) payable at completion and QR100m (€22m) payable 12 months after completion, which is expected in the next three months, said a statement in Vodafone’s website.

A person familiar with the situation said the decision stemmed from its wider move to sell assets it did not control, reported The Peninsula.

The world’s second-biggest mobile operator has spent several years selling minority stakes under its Chief Executive Vittorio Colao, who is seeking to streamline the sprawling group, exiting countries such as Poland, China and France.

Vodafone and the Qatar Foundation hold 45% of Vodafone Qatar through a joint venture, with the rest of the operator owned by the government of Qatar and other investors. Vodafone holds 51% of the joint venture.

Once the buyout is complete, Qatar Foundation will own 50% of Vodafone Qatar.

Vodafone is understood to provide technical support for a period of at least five years. Ian Gray, the Qatari unit’s chief executive, will retire after the March 19 shareholder meeting and will be replaced as CEO by Sheikh Hamad bin Abdullah Al Thani, the company’s current chief operating officer, reported Bloomberg.

The transaction values Vodafone Qatar, which provides mobile and fixed-line services to around 1.4m customers, at an enterprise value of €1.45bn.

Vodafone Qatar plans to restructure its balance sheet to eliminate the 4.3 billion riyals ($1.18 billion) in accumulated losses, which it said was attributable to the ‘amortisation costs’ of its license to operate in Qatar, reported Bloomberg. It reached an agreement with the government to extend its telecommunications license by 40 years to 2068.