As part of its plan to exit the Middle East, MTN is in talks to sell MTN Syria to TeleInvest, the operator disclosed on Thursday.
“As part of this process, we are in advanced discussions to sell our 75% stake in MTN Syria to TeleInvest, which is the minority shareholder in MTN Syria with a 25% holding,” MTN said.
“As part of the review of our portfolio, we believe the group is best served to focus on its pan-African strategy and to simplify its portfolio by exiting the Middle East region in an orderly manner over the medium term.”
TeleInvest owns a 24% stake in MTN-Syria and is a subsidiary of the Saudi conglomerate, Dallah al-Baraka Holding. Registered in the Cayman Islands, presumably for tax purposes, Teleinvest has been one of MTN-Syria’s long-term investors, having bought its stake in the company back when MTN-Syria was known as Spacetel.
The Middle East assets contributed less than 4% to group EBITDA in the six months to end-June
MTN Syria contributed 0,7% to MTN’s reported EBITDA in the first six months of 2020.
The net assets attributable to MTN Syria in the MTN Group accounts have been written down to an estimated recoverable amount of R1,4 billion (US$80 million).
The foreign currency translation loss of R4,8 billion as of 30 June 2020, that has accumulated over time, will be released to the income statement at the conclusion of the transaction.
“This will negatively impact EPS, but will have no material impact on HEPS, cash flow or the balance sheet.”