Bahrain’s Batelco has mandated Citigroup to sell its Jordanian mobile operator Umniah, two sources familiar with the matter told Reuters.
Umniah, Jordan’s No.3 mobile operator by subscribers, competes with Zain Jordan, a unit of Kuwait’s Zain, and France’s Orange in the country of 7.9 million people bordering war-torn Iraq and Syria.
The Bahraini former monopoly paid BD156.9 million ($416.2 million) for a 96 per cent stake in 2006, but offloading the business could prove tough due to market dynamics.
“It’s early stages but I would be surprised if it gets huge interest,” said a senior Gulf-based banker. “It’s a difficult asset in a difficult market, and most of the regional telcos who would be the natural buyers won’t be interested.”
The banker and another source familiar with the matter said Citigroup had been mandated for the potential sale.
“Batelco’s board of directors continues to explore opportunities in the sector as well as monitoring the performance of the investment portfolio,” the company said in a bourse filing in response to media reports of a potential sale.
“Currently, no decision has been taken by the board to sell any investment.”
Citi declined to comment.
Batelco, which has a market capitalisation of $1.5 billion according to Reuters data, made a profit of BD46.87 million in the nine months to Sept. 30. Of this, Jordan accounted for BD4.67 million, or 10 per cent.
The Jordanian unit’s nine-month profit fell 25 per cent from a year earlier, despite its mobile subscribers increasing by eight per cent to 2.9 million over the same period.
Zain is Jordan’s market leader with a 39 per cent share of subscribers, according to its third-quarter earnings, followed by Orange with 31 per cent and Umniah on 30 per cent.