Moody's may cut Etisalat

Moody's Investors Service said it placed Emirates Telecommunications Corp. Ltd. (Etisalat) on review for possible downgrade.

The action was prompted by news of Etisalat's proposal to acquire 51% of the Mobile Telecommunications Co. LLC for $12 billion, which has now become binding.

While Moody's noted that the offer remains conditional, the agency said it will examine the potential impact of this binding offer on Etisalat's ratings. The review also will take into account the structure of the acquisition financing.

Moody's said it will consider the risk associated with the integration, the company's ability to maintain high margins and the government-related issuer status of Etisalat.

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