Emirates Telecom plans buyouts after credit ratings

By John Irish

DUBAI, July 22 (Reuters) - Emirates Telecommunications Corp ETEL.AD (Etisalat) said on Tuesday it received its first credit ratings as the fast-expanding firm positions itself for at least one acquisition worth $500 million by October.

Citing state-controlled Etisalat's strong market position, profitability and government affiliation, Moody's Investors Service gave the telecom operator an Aa2 rating. Standard & Poor's gave an A+ rating and Fitch an AA- rating.

Etisalat Chief Financial Officer Salem Ali al-Sharhan said the largest Arab telecom firm by market value solicited the rating as a "health check" on its financial position to help facilitate future acquisition plans.

"It prepares us for future financing for expansion overseas or investments ... whether capital markets such as bonds and medium-term note programmes or commercial debt," Sharhan told Reuters.

Under Etisalat's founding constitution, the government of the world's fifth-largest oil exporter must own at least 60 percent of the telecoms company, which operates in about 16 countries including Egypt, Pakistan, Saudi Arabia and Indonesia.

While it can finance acquisitions of less than $500 million with its own cash, Etisalat would need to tap debt markets for "medium- and big-sized investments" valued at greater than $500 million, Sharhan said.

"We hope to have a few done (of that size) in one or two months," Sharhan said. "We have potential opportunities in the pipeline and are carrying out due diligence on some of them."

Sharhan did not say which markets Etisalat could enter through acquisitions this year.