VODAFONE BUYS 51% OF RAYA TELECOM
Mobile phone operator Vodafone Egypt and telecommunications group Raya Holding are in the process of handing over company shares, after a contract sale agreement, says Jihan Mahmoud, senior marketing executive at Raya Holding.
The agreement is for a 51% takeover of Raya Telecom by Vodafone Egypt, he says. Raya Telecom is the Internet arm of Raya Holding.
The deal is worth $18 million, amounting to 823 140 shares, Mahmoud says. The agreement grants Raya Holding the right to sell its remaining shares, being 45.9% of Raya Telecom, to Vodafone Egypt within the next two years with the same agreed value per share, according to a company press release.
Raya Holdings sold the Raya Telecom share as it was looking for a strong partner to help it grow in market strength, says Mahmoud.
“We needed a strong partner to improve the standard of the company.”
Raya Telecom is one of the eight subsidiaries under Raya Holding and was showing poor growth. “The company needs a boost, which can be achieved through a combination of Internet and telecommunication strength,” he says.
Raya Holding was looking for a company specialising in the telecommunications field and Vodafone was the obvious choice, Mahmoud notes. He adds that Vodafone is injecting around $9 million into the company, which will bring the total paid capital to around $37 million to help build up the firm.
It is too early to say how the partnership is going, says Mahmoud. “The companies are still implementing their business strategies and will only start to see results in about six months.”