GO's majority shareholder wants out

GO plc has announced that its majority shareholder, Emirates International Telecommunications Malta Limited (EITML), has informed its board of directors of its intention to seek to dispose of its shareholding in the company in the short term.

EITML – a subsidiary of Dubai-based Emirates International Telecommunications LLC (EIT) – owns 60% of GO plc.

In a stock exchange announcement, GO said it would be making further announcements as and when required by listing rules.

EITML has stakes in du, Axiom Telecom, and Interoute, and serves as the primary telecoms investment vehicle for Dubai Holding – the global investment company owned by Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum.

Yesterday, GO plc shareholders endorsed the spin-off of a subsidiary, Malta Properties Limited (MPL), into a separate, and publicly listed, entity focused on the property management of various parcels of land devolved to it by the government.

Based on a recent report carried out by firm Architecture Project, MPL’s property portfolio, covering 11 different sites, is valued at nearly €53 million.

“The spin-off of MPL will allow GO to focus on its main business of communication while MPL focuses on maximising long-term value for our shareholders from the Company’s extensive property portfolio,” MPL chief executive Nikhil Patil said.

As a result of the MPL spin-off, all GO shareholders will receive exactly the same number of shares in the new entity as they currently own in GO.

A representative from HSBC Malta plc asked the board of directors during the EG whether it was EITL’s intention to also dispose of the shares in the spin-off company. Chairman Deepak Padmanabhan, who is appointed by EITML, replied that issues of shareholder intentions would not be answered by the board of directors.

Observers were surprise at the speculative question from a representative of a leading financial institution, since it is not customary for HSBC to participate actively in the general meetings of other listed companies.

The necessary changes to GO’s memorandum and articles of association and a related resolution enabling the restructuring, were approved during an extraordinary general meeting.

“As the two companies will now be listed separately, shareholders are also free to either maintain their shareholding in both companies or to focus more on the company which better suits their investment objectives. The properties in our portfolio have considerable potential for redevelopment which should drive growth based on the solid foundation of also having GO as a key tenant in some of our sites.”

GO plc chairman Deepak Padmanabhan said GO was a communications company, not a property manager or developer, so there was a clear rationale for empowering MPL with the freedom to redevelop the 11 properties and generate new income streams. “Two years ago, GO had made clear that it wanted to pursue a clear strategy to develop its substantial property portfolio and maximise value for shareholders. Different options were evaluated and the conclusion reached that a Spin-off would be the best approach to achieve our objectives.”