Saudi Arabian telco Etihad Atheeb Telecom (GO Telecom) has announced that the Memorandum of Understanding (MoU) signed between Bayanat Al-Oula, a subsidiary of Etihad Etisalat (Mobily), Saudi Arabia’s second largest cellco in terms of subscribers, and the main shareholders of GO Telecom for Mobily’s acquisition of the Saudi fixed line and broadband operator, has been cancelled. Further, the two companies have also cancelled a side deal, signed in April 2014, under which GO Telecom had been granted the rights to use 50,000 fibre-optic access points in order to provide broadband access and fixed telephony services to residential users and private businesses.
As previously reported by TeleGeography’s CommsUpdate, Bayanat Al-Oula inked the agreement with Atheeb Trading Company, Batelco of Bahrain and Al-Nahla Trading Company on 20 August 2013. The proposed transaction was subject to regulatory approval by the Kingdom’s telecoms watchdog the Communication and Information Technology Commission (CITC) and Saudi Arabia’s Capital Market Authority (CMA), and the satisfactory completion of specific commercial, financial, legal and technical conditions; a 30 November 2013 deadline was initially earmarked for the deal’s completion. By the end of April this year, Bayanat Al-Oula had successfully completed its ‘commercial, financial, technical and legal due diligence’ for the deal, and the two parties were in the process of structuring the proposed acquisition; GO Telecom was seeking shareholder approval to write off up to 100% of its accumulated losses by way of cancelling shares in order to decrease its capital, while Bayanat would thereafter accumulate shares representing 20% of GO Telecom’s total share capital by acquiring the founding shareholders subscription rights.