Vodafone exits talks with STC on the sale of a 55% stake in Vodafone Egypt

Vodafone Group plc (LON: VOD) said on Monday that it pulled out of talks with Saudi Telecom Company after the largest telecom operator in the Kingdom missed multiple deadlines to fulfil the agreement that entailed it buying a 55% stake in Vodafone Egypt.

Vodafone shares opened about 0.5% down on Monday and slid another 3.5% in the next hour. The British multinational now has a per-share price of 122 pence. In comparison, it had started the year 2020 at 148 pence per share. In March, when the impact of the COVID-19 crisis was at its peak, Vodafone had tumbled to 98 pence per share in the stock market.

Vodafone swung to a pre-tax profit of £1.84 billion in H1

In a preliminary deal announced in January, STC had said it will get a £1.81 billion stake in Vodafone Egypt. The move was aimed at expanding its footprint in the largest Arab market by population.

In a report published in November, Vodafone said it swung to a pre-tax profit of £1.84 billion in the fiscal first half. On the back of hawkish performance in H1, the company said its annual performance was likely to show resilience as it forecast £13.08 billion of adjusted EBITDA for the full year.

The British telecommunications company had expressed confidence in an earlier statement that negotiations were still ongoing with Saudi Telecom Company even after the initial MoU (Memorandum of Understanding) expired. Vodafone had said in September that a final agreement was to be signed in the near future.

Chief Executive Nick Read’s comments on Monday

CEO Nick Read of Vodafone Group commented on the news on Monday and said:

“We believe that the Egyptian government is committed to an optimal framework for the telecoms sector, which will enable Vodafone Egypt to deliver on the country’s vision to the digitisation and financial inclusion and create a technology hub to support our growth in the African region.”

In separate news on Monday, the world’s 1^st and leading mobile traffic sharing marketplace, uCloudlink Group Inc. said it had extended its partnership on data procurement with Vodafone Global Enterprise.

Vodafone performed slightly downbeat in the stock market last year with an annual decline of roughly 5%. At the time of writing, the Berkshire-headquartered company is valued at £32.47 billion and has a price to earnings ratio of 15.69.