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India’s Essar Signs Deal to Invest in Dhabi Group’s Telecom Assets

ABU DHABI/NEW DELHI — The UAE’s leading business conglomerate Dhabi Group, has announced a partnership with India’s Essar Group, where Essar will make investments into the telecom assets of Dhabi Group in Uganda and in the Republic of Congo.

Essar is to invest in Warid Telecom in Uganda and in the Republic of Congo, with an enterprise valuation of operations collectively prized at a whopping $318 million. The agreements were signed by Dhabi Group Chairman Shaikh Nahyan Mubarak Al Nahyan, and Group Chief Executive of Essar Group, Prashant Ruia, in Abu Dhabi, on Sunday.

The signing of agreements by the two companies also mark the beginning of an era where Essar Group would further increase its presence in the Middle East and African region by forging new partnerships, Ruia told Khaleej Times from Mumbai. Essar Group’s investment in Warid telecom is a part of its strategic plans to expand its business in Africa, he admitted.

The deal also reflects Dhabi Group’s vision to partner with other leaders in expanding and adding value to their telecom investments. While Essar Group has committed growth capital to both telecom operations in Uganda and Congo to facilitate network expansion and marketing, it is expected that upon completion, Essar will acquire a majority stake in both the assets, 
said Ruia.

The partnership with Dhabi is also expected to bring operational efficiencies to the African operations. Essar Group quoted Shaikh Al Nahayan as saying: “We are pleased to join hands with a group (Essar) that both complements and extends our synergies to expand further into Africa.”

Shaikh Al Nahayan added: “Warid has expanded its green field operations to become credible competitors and challengers in the market where it operates; the time is now right for the next stage of its growth and evolution.” Ruia added: “Essar is delighted to partner with the Dhabi Group to expand Essar’s telecom operations.” “This transaction with the Dhabi Group augments our successful launch of telecom services in Kenya under the brand ‘yu’ which was a stepping stone for Essar to expand its telecom footprint to the African continent,” he said.

Essar’s investment in Warid Telecom is a part of its strategic plans to expand its business by forging partnerships with prominent business groups in the Middle East and Africa. After the launch of ‘yu’ brand, Essar’s telecom venture is now expanding its footprint in East Africa with Uganda and 
Congo operations.

Regarded as one of the fastest growing telecom operators in Kenya, Essar Telecom Kenya has over 600,000 subscribers, and expects this number to grow significantly as it completes its rollout across Kenya. The Dhabi Group has diversified business interests with a focus on emerging markets in financial services, telecommunications and real estate.

Essar Group’s energy business too had announced recently the completion of the acquisition of a 50 per cent stake in Kenya’s Petroleum Refineries Ltd, or KPRL, with the Government of Kenya holding the remaining stake.

· ravi@khaleejtimes.com

· haseebhaider@khaleejtimes.com