Abu Dhabi-based telecoms company Etisalat has reportedly asked a number of banks to extend their commitments to the loan backing its EUR4.2 billion (USD5.79 billion) purchase of the 53% controlling stake in Moroccan telco Maroc Telecom, with a view to avoiding the payment of fees until the deal actually closes, Reuters reports. According to unnamed sources close to the deal, the banks are unlikely to receive ‘ticking fees’ (fees paid to compensate for the time lag between the commitment allocation on a loan and the actual funding) for the loans, rendering them less profitable than expected. A senior banker is cited as saying: ‘The protracted nature of this deal makes it a challenging proposition. This just has not been the great M&A fee event that it might have been.’
As previously reported by TeleGeography’s CommsUpdate, in April 2013 Etisalat secured a USD8 billion dual-tranche loan facility to finance its bid for the acquisition of Vivendi’s North African unit, with BNP Paribas acting as financial adviser; under the terms set out by the agreement, the funding will be divided equally between a term loan and a bridge loan, which will later be refinanced through a bond sale. In November 2013 Vivendi signed a definitive agreement with Etisalat for the sale of its controlling 53% stake in Moroccan telco. It was agreed that the UAE-based telco will pay Vivendi EUR3.9 billion for the stake, in addition to EUR300 million in Maroc Telecom’s 2012 dividends. The deal is expected to be concluded in early 2014.