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Mobile

HiTs Telecom Seeks to Raise $300M

Saudi Arabia-based holding company HiTs Telecom is racking up acquisitions and licenses as part of its strategy to have at least eight operators in emerging markets, and it's looking into offering a $300 million rights issue to raise funds for its expansion.

Through its subsidiary HiTs Africa, the company was recently awarded a license in Equatorial Guinea to launch the country's second national operator. It plans to launch a GSM-based mobile network by the end of the year, adding WiMax and broadband data networks by 2009. (See HiTs Wins Guinea License.)

HiTs announced earlier this week that it's branching out into Latin America, acquiring a 49 percent stake in Unicel, which is set to launch a GSM network covering the São Paulo area of Brazil in June. HiTs paid $62 million for the stake, and has the option to increase its holding to 75 percent after three years. It has established a new subsidiary, HiTs America, to handle its interests in the region.

HiTs is already building fixed and mobile networks in Tanzania and the Democratic Republic of Congo, holds a stake in Liberian operator HiTs Liberia, formerly Libercell -- all part of its $1 billion investment plan for Africa. (See Saudis Unveil $1B Plan for Africa.) It also runs HiTs Unitel in Yemen.

HiTs Telecom's sister company, HiTs Telecom Uganda, runs that country's fourth operator, and has been awarded the sixth mobile license in Burundi.

To raise funds for all this activity, HiTs Telecom is planning to offer around 50 percent of its stock in a rights issue to private equity investors to raise $300 million. (See HiTs Plans Rights Issue.)

As part of a convoluted restructuring plan, HiTs Africa investor Al Madina for Finance and Investment Co. has transferred part of its stake to Nibras Holding Co., a Kuwait-based subsidiary company that owns and manages schools. Nibras, which trades shares on the Kuwait stock exchange, has been renamed HiTs Telecom Co.

HiTs Telecom itself intends to restructure around three sectors: network operations, mobile virtual network operators (MVNOs), and distribution.

In Saudi Arabia it provides distribution services through its subsidiary Qanawat, retail mobile services through 4Run, and mobile payments via Q Pay. It's also part of the consortium behind Integrated Telecom Co. (ITC), Saudi Arabia's second fixed-line service provider.

On the MVNO front, HiTs is looking to expand into Europe, where it is in talks to acquire a 51 percent stake in an unnamed MVNO that would serve as a stepping stone into other European markets.

— Nicole Willing, Reporter, Light Reading

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