A unit of Saudi Arabia’s second top mobile firm Etihad Etisalat (Mobily) has signed a memorandum of understanding with four shareholders in Etihad Atheeb to buy a controlling interest in the loss-making fixed line operator.
Bayanat al-Oula, wholly owned by Mobily, signed the memorandum with Atheeb Trading Co, Al Nahla Group, Traco Group for Trading and Contracting and the Saudi Internet Co, according to a bourse filing on Wednesday.
The agreement outlines the basis for which a final agreement will be concluded, the filing said. It requires regulatory approvals to be obtained and for Bayanat to complete due diligence by November 30.
Mobily, an affiliate of the United Arab Emirates’ Etisalat does not have a fixed-line license and acquired data provider Bayanat Al-Oula for 1.5 billion riyals ($399.98 million) in 2008 to offer fixed-line internet services.
It earlier signed another memorandum of understandign with Atheeb, which operates under the brand name Go, in December to offer fixed-line calls.
Atheeb Trading Co holds a 16.4 percent stake in Etihad Atheeb, Al Nahla has 13.9 percent and Traco Group owns 5.9 percent.
Saudi Internet Co holds an undisclosed stake in the company, which is part of the 49 percent of Etihad Atheeb’s shares that are publicly listed, according to data from Thomson Reuters company Zawya.
Bahrain Telecommunications Co (Batelco) also has a 15 percent stake and it is unclear whether the company plans to sell. Batelco was not immediately available for comment.
Atheeb made a net loss of 274.1m riyals in the financial year ending March 31, 2013.
Atheeb’s shares rose 1.3 percent to a seven-week high on the Saudi bourse, while Mobily ended 0.9 percent higher.