Cable and Wireless Communications sells Dhiraagu majority stake to Bahrain’s Batelco

Dhiraagu has said it remains “businesses as usual” for its operations after the group’s majority shareholder Cable and Wireless Communications (CWC) announced today it would be selling its stake in the company to Bahrain-based Batelco.

The agreement will see CWC divest its businesses in a number of nations, including the Maldives, Channel Islands and Isle of Man, the Seychelles, Diego Garcia as well as other South Atlantic operations it has stakes in for a fee of US$680 million (MVR10.4bn).

Dhiraagu’s Manager for Marketing, Communications and Public Relations Mohamed Mirshan Hassan told Minivan News that Batelco’s purchase – expected to be completed by the end of CWC’s present financial year – would have no immediate impact on the company’s existing services or expansion plans. Batelco has pledged to invest further in the company to strengthen Dhiraagu’s position in the Maldivian telecommunications sector.


As of March this year, CWC controlled 52 percent of Dhiraagu’s shares, with the government holding just under 42 percent.

Mirshan added that there had been no discussions over whether its new majority shareholder would look to add to its stake  in the telecommunications provider.

“There has been no mention of this at the moment,” he said, adding that it would remain “business as usual” for the company once the sale of its shares had been completed.

In addressing the sale, CWC CEO Tony Rice said that the company was selling its Monaco and Islands portfolio, which includes the stake in Dhiraagu, as part of its wider aims to expand the group’s Pan-America operations.

Meanwhile, Batelco Group Chief Executive, Sheikh Mohamed bin Isa Al Khalifa said the group would look to make further investment in Dhiraagu following completion of the deal.

“Batelco is in the process of building a telecoms business of global relevance of which the Maldives will be an important part,” he said. “We will continue the development of Dhiraagu as a market leader and we are looking forward to supporting each of the businesses and contributing to the communities they operate in.”

Dhiraagu itself is one of the country’s largest service providers, dominating the internet and telecommunications sector alongside its main competitor, Wataniya.

Set up back in 1988, the company has said it presently employs over 600 staff across the Maldives, 99 percent of whom are said to be local workers.

CWC took a controlling stake in Dhiraagu in 2009 when former President Mohamed Nasheed’s government sold 7 percent of its shares, giving the British-based firm a controlling stake in the company.

Then-opposition parties criticised the sale in local media, arguing that the acquisition of large stakes of domestic companies by foreign investors was bad for the country.

Similar arguments have been levelled against the development of Ibrahim Nasir International Airport (INIA) by Indian company GMR. Earlier today, GMR secured an injunction from the High Court of Singapore against the Maldives cabinet’s earlier decision to void its concession agreement for the US$511 million project and issue the developer with a seven day eviction notice.

The Maldivian government nonetheless has today dismissed such an injunction and vowed that the airport will be run by the state-owned Maldives Airport Company Limited (MACL) by the coming Saturday (December 7).


Bahraini company interested in Cable & Wireless’ Dhiraagu shares

Dhiraagu’s leading shareholder, Cable and Wireless Communications (CWC), has received an offer from a Bahraini company regarding its Monaco & Islands business unit.

This section of the multinational’s portfolio – one of four regional units – consists of Monaco, the Maldives, the Channel Islands, the Isle of Man, the Indian and Atlantic Oceans, and Africa.

The company has released a press statement confirming the approach.

“Cable & Wireless Communications Plc today confirms that it has received an approach from Batelco Group regarding a possible transaction involving its Monaco & Islands business unit,” read the statement.

“At this point, there can be no certainty that the discussions will lead to a transaction,” it added.

CWC took a controlling stake in Dhiraagu, the Maldives’ largest telecommunications company in 2009 when former President Nasheed’s government sold 7 percent of its shares, giving the British-based firm a controlling stake in the company.

Then-opposition parties criticised the sale, arguing that the acquisition of large stakes of domestic companies by foreign investors was bad for the country.

Similar arguments have been levelled against the development of Ibrahim Nasir International Airport (INIA) by Indian company GMR, sparking fears that foreign firms will be deterred from investing in the Maldives.

CWC now controls 52 percent of Dhiraagu’s shares,with the government holding just under 42 percent as of March this year.

Dhiraagu is currently the largest company on the Maldives Stock Exchange (MASEX) by market capitalisation after listing in January this year.

CWC’s 2011/12 financial report showed that it made $586million in pre-tax revenue from it ‘Monaco & Islands’ interests – 83 percent of this pre-tax revenue came from the company’s interests in Monaco, the Maldives and Guernsey.

The report mentioned that, despite strong growth which saw the Maldivian Rufiyya (MVR) revenue increase by 3 percent, the free float of the currency resulted in a 14 percent loss compared with the previous year’s US Dollar (USD) revenue.

The April 2011 decision to allow the MVR to be traded within 20 percent of the pegged rate of MVR12.85 to the USD effectively devalued the currency as the exchange rate rose quickly to MVR15.42 to the USD without moving since.

Praised by the International Monetary Fund (IMF) as “an important move toward restoring external sustainability,” although some local experts described the decision as “high risk” and “unpredictable”.

“CWC has long been seen by analysts as wanting to sell its island assets, as well as its unit in Macau, given its longer term strategy of focusing on its core business in the Caribbean,” said Britain’s Financial Times .

Batelco (Bahrain Telecommunications Company) operates in Jordan, Kuwait, Saudi Arabia, Yemen, Egypt and India, as well as its home market.

The Financial Times reported that the company was seeking to expand its foreign investments after its domestic subscribers and profitability had dipped, citing stiff local competition.

“Bahraini companies have suffered amid political unrest in the Gulf state that led to widespread protests and a security crackdown,” the paper added.

The company’s shares on the Bahrain Bourse have fallen nearly 13 percent so far this quarter.