Standard & Poor's Ratings Services said today that its ratings and outlook on Emirates Telecommunications Corp. (Etisalat) (AA-/Stable/A-1+), the former incumbent fixed-line and leading mobile telecoms operator in the United Arab Emirates, are not immediately affected by Etisalat's announcement that its offer to buy a 51% stake in Mobile Telecommunications Company (Zain)--for about US$12 billion at KWD 1.70 per share--has become binding.
"We understand that the offer is subject to multiple conditions. Etisalat will have the option not to proceed with the deal if these conditions are not met or if it is unsatisfied with the results of due diligence. We understand that the binding offer is a requirement to start formal due diligence and that the parties have not yet negotiated any principal terms and conditions. We assume that Etisalat's recently announced plans to issue US$7 billion in medium-term notes, which could significantly weaken its financial profile, will materialize only if the transaction happens," the ratings agency said.
"Standard & Poor's will continue to monitor any developments related to this potential transaction and the possible impact on Etisalat's credit profile. Should we see the likelihood of the transaction increasing, the ratings on Etisalat would likely be placed on CreditWatch to assess the credit implications for the company," S&P added.
No comments:
Post a Comment