Prospects increase for wining international calls license, says Raya official
CAIRO: Raya Holdings announced its acceptance of the principle of Vodafone Egypt acquiring 51 percent of Raya Telecommunications’ shares for LE 104 million yesterday, after the board of directors gave it the green light on Monday. Officials said the contract would be finalized within the next three weeks.
“This marks a major step forward in Raya Holding developing its ongoing relationship with Vodafone, says Medhat Khalil, chairman and CEO of Raya Holding. “The complimentary skills and scale benefits of Vodafone and Raya working together will create a giant leap in the Egyptian telecommunication industry. Cooperation with Vodafone is inline with our strategy to grow value added and outsourced services in all our lines of business.
According to Khalil several companies, on local, regional and international levels had made offers buy the company. “But I don’t think we could have made a better choice, adds Khalil in reference to Vodafone Egypt (VFE).
He explains that while other companies have offered to fully purchase Raya Telecommunications, the profitability of the growing communications field made company officials adamant to stay. Thus when VFE offered to acquire 51 percent of the company’s shares, Raya Holdings agreed.
Stock prices are expected to increase after the sale is finalized.
Being one of eight companies working under Raya Holdings, Raya Telecommunications is a leading data operator. Since 2001, it has provided communications services to corporate and consumer segments. Its areas of expertise are divided between providing dial-up and ADSL Internet services to regular consumers and hosting servers and private virtual networking to enterprises.
The company has invested about LE 160 million on building infrastructure for its operations, and is still to see the margin of profit increase to be on the rewarding level, says Khalil.
With VFE on board, Raya Telecommunications would have better prospects in wining the license for international calls, if it is sold in a bid, and in operating it in the future, adds Khalil.
The decision to put the company shares for sale, he continues, was not because of financial problems but to bring the required know-how on board. This is also why, he adds, VFE would have the upper hand in management.
“With the increasing projects in the sector we felt [the importance] of having a strategic partner, notes Khalil.
Besides having their eyes set on the international calls license, Raya officials are also interested in other related licenses including the WiMAX technology. All these plans, explains Khalil, require experience and financing, which are available in VFE.
“We are delighted to be working with Raya Holdings and look forward to driving synergies between the businesses, says Ian Gray, CEO and managing director of VFE, “And helping all the talented individuals in Raya Telecom to continue to deliver market leading solutions to the corporate customers in Egypt.
While VFE has 51 percent of the company, Raya Holdings owns 45 percent of the shares, Bank Misr holds 3.3 percent and the remaining 0.7 percent are distributed between other smaller investors.
The details of the company’s structure, possible new name and future operations are to be announced after the contracts are finalized. This does not, however, mean that Raya Holdings does not already have plans to capitalize on the purchase.
Khalil highlighted the company’s strategy using the purchase money: LE 104 million. There are plans to fully or partially purchase C3, a major call center company; expand in the Algerian market, increase investment in Raya related banking services; increase showroom and outlets chain to reach 60 by the end of 2007; expand maintenance services in the Middle East; and study venturing in African markets.
Benefits would be felt on the other side as well; Khalil explains that both companies would benefit from the services the other offers.