26% holding in company was sold for AED800 million
DUBAI: Emirates Integrated Telecommunications Company (EITC) or Du, has earned a profit of AED521 million from the sale of 26 per cent (indirect) stake it held in Khazna Data Centre Ltd for AED800 million to Technology Holding Company LLC (THC) that holds the controlling stake at 74 per cent.
The transaction, which is subject to customary closing mechanics according to Du management, derives a valuation of AED3.077 billion for Khazna Data Centre. The sale was approved at the board meeting of the company held on September 8, 2020.
EITC Investment Holdings Ltd, a wholly owned subsidiary of EITC, and the direct holder the stake, has signed with THC, a sale and purchase agreement in respect of the transaction for sale price for the stake at the said AED800 million.
The profit of AED521 million earned from the transaction is about 2.5 times the profit EITC earned from its operations during the second quarter ending June 30, at AED215.29 million. It’s also close to AED570.41 million, the net profit the company reported for the first half of 2020.
An EITC statement said the transaction is in line with the company strategy of pursuing data centre development through either full ownership or commercial partnerships.
“The cash flow as well as the profit will be reflected in the company’s third quarter financial statements assuming a completion of the transaction before September 30, 2020,” the statement added.
Khazna Data Centre Ltd is based in Masdar City Free Zone in Abu Dhabi and its business is providing wholesale data centre services. EITC holds 23.53 per cent in another associate company, Dubai Smart City Accelerator FZCO, a Free Zone company established in Dubai Silicon Oasis Free Zone.
The business of this associate is to run accelerator programs with the purpose of sourcing innovation and technology applicable to the Smart City Industry.