Qatar has faced an embargo from Arab countries since June last year and the business has not been one of the stronger performers in the Vodafone portfolio, but according to Reuters, a person familiar with the situation said the decision stemmed from its wider move to sell assets it did not control.
Vodafone Qatar losses have been building since the company started operations in 2009.
Announced last February, Vodafone Europe agreed to sell its stake in a Qatar joint venture for €301 million, capping an almost decade-long string of losses amounting to more than $1 billion (€816 million).
Qatar Foundation, a non-profit run by the gas-rich country’s royal family and Vodafone’s partner in the country, agreed to buy the exiting company’s stake and will own 50 percent of Vodafone Qatar when the transaction is completed.
The acquisition values Vodafone Qatar at an enterprise value of EUR1.45 billion.
The British company said despite the sale its brand would remain in Qatar as part of a partnership agreement that will run for an initial term of five years. The transaction values Vodafone Qatar, which provides mobile and fixed-line services to around 1.4 million customers, at an enterprise value of 1.45 billion euros.
“We have experienced great success over the years in building our joint business in Qatar and always enjoyed a strong working relationship with the Qatar Foundation,” said Vivek Badrinath, head of Vodafone’s Africa, Middle East and Asia-Pacific region said.
Additional financial information:
Contribution of Vodafone Qatar to Vodafone Group financial statements:
|€m**||12 months to Dec 2017|
|Free Cash Flow contribution to Vodafone||51|
* FX €1 = QAR 4.48 as at 25 February 2018
** FX €1 = QAR 4.11 for the reporting period 12 months to Dec 2017.
*** Vodafone Group has extended US$223 million (€181 million) of funding to Vodafone Qatar under the 2014 Wakala investment agreement. These funds will be repaid to Vodafone Group in November 2019. FX €1 = USD 1.23 as at 25 February 2018.
Vodafone Group and Vodafone Qatar have entered into a five year Partner Market agreement, ensuring Vodafone Qatar will continue to use the Vodafone brand and benefit from the expertise and assets of Vodafone Group.
Vodafone Qatar will continue to use the Vodafone brand, the company said.