(Reuters) - (The following statement was released by the rating
agency)
Fitch Ratings says that Qatar Telecom Q.S.C.'s
(Ooredoo; A+/Stable) newly awarded Myanmar's license should have no impact on
its rating. Ooredoo has won one of the two licences made available to foreign
operators in the Myanmar government's recent bid process to build and operate
mobile networks in the country.
We estimate that the new investment will require around USD2.5bn to USD3.0bn
of
investments and capex over the next three years. As this is a greenfield network
roll-out, we do not expect any material positive contribution to group EBITDA
over the medium term. The new license is also much smaller in terms of scale
than the recently withdrawn Maroc Telecom bid (see 'Fitch Monitoring Ooredoo and
Etisalat's Offers to Acquire Vivendi's 53% Stake in Maroc Telecom' dated 26
April 2013 at www.fitchratings.com).
In Fitch's view, current estimates suggest this new investment has no
implications on the implied support of or commitment from the State of Qatar,
which directly and indirectly holds 68% ownership of Ooredoo, the main driver of
the entity's ratings. Fitch continues to apply its parent and subsidiary rating
linkage methodology in rating Ooreedoo. Ooredoo's rating reflects Fitch's
assessment of the sovereign's creditworthiness due to Ooredoo's strong
operational and strategic ties with the State of Qatar. This implied state
support underpins the strong rating category and offsets risks associated with
diversification into weaker rated emerging markets, slowing sector growth and M&A risk.
Fitch also expects that Ooredoo will continue to operate within its own
leverage
guidance, which is 1.5x to 2.5x net debt/EBITDA. We recognise that this ratio
can fluctuate quite significantly within these limits depending upon any large
scale M&A. Fitch draws comfort from its opinion that if the group breached these
levels and struggled to deleverage within a short forecast period (12 months),
equity support from the State of Qatar would be forthcoming to reduce the
position and place leverage levels on a more stable footing.
As there is currently little detail on the structure, timing and size of the
transaction, Fitch is not taking any rating action at this time. However, the
agency will closely monitor the transaction's evolution and evaluate the impact
of any changes to Ooredoo business and financial profile.
source: Reuters
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