CI Capital - Telecom Egypt S.A.E. GDR Buy Vodafone, get TE for free

Report

CI Capital

Alia El Mehelmy

EUR 22.10 For Business Accounts Only

Buy Vodafone, get TE for free

Market price post MSCI exclusion only reflects TE’s stake in Vodafone. Even without TE’s net cash (EGP2.9bn), investors at current market price would be buying TE’s stake in Vodafone (VFE) at a 2016e EV/EBITDA of 4.6x, in line with traded peers, and getting the fixed line for free. We value VFE at the same multiple but discount TE’s net cash to c45% in order to neutralize the MVNO’s destructive value of EGP1bn as well as the EGP0.8bn TE will owe on the implementation of a recent interconnect ruling in favour of VFE. Further share price pressure post 29 May from MSCI-tracker outflows presents a buying opportunity.

17/05/2015 6 EN

Underlying

Telecom Egypt S.A.E. GDR

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US87927T2024 Egypt

Provider

CI Capital

CI Capital is a diversified financial services group and Egypt’s leading provider of leasing, microfinance, and investment banking products and services.

Through its headquarters in Cairo and presence in New York and Dubai, CI Capital offers a wide range of financial solutions to a diversified client base that include global and regional institutions and family offices, large corporates, SMEs, and high net worth and individual investors.

CI Capital leverages its full-fledged investment banking platform to provide market leading capital raising and M&A advisory, asset management, securities brokerage, custody and research. Through its subsidiary Corplease, CI Capital offers comprehensive leasing solutions, including finance and operating leases, and sale and leaseback, serving a wide range of corporate clients and SMEs. In addition, CI Capital offers microfinance lending through Egypt’s first licensed MFI, Reefy.

The Group has over 1,700 employees, led by a team of professionals who are among the most experienced in the industry, with complementary backgrounds and skill sets and a deep understanding of local market dynamics.

CI Capital has been recognized as the “Best Investment Bank in Egypt” by EMEA Finance for four years running from 2013-2016, and by Global Finance in 2014 and 2015.

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Analysts

Alia El Mehelmy

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Buy Vodafone, get TE for free

Excellent start to the year

Q4 2016, Unexpected brutal crash

Drop to Neutral on proposed fixed broadband rate cuts

Egypt banks | Higher RRR: A manageable headwind; flag CAE

The Pulse | Cityscape Egypt 2022: Positive vibes

EKHO EY | EGP listing offers ideal currency hedge

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