Vivendi ups Moroccan phone stake

Vivendi Universal has been in talks with the government for months

French firm Vivendi Universal has increased its stake in Morocco's national telecoms operator days before its partial flotation.

Vivendi is to pay 1.1bn euros($1.4bn) to increase its stake in Maroc Telecom to 51% from its current 36% holding.

Maroc Telecom is due to list 15% of its shares on the Moroccan and French stock markets next week in a sale which could raise 700m euros for the government.

Maroc Telecom has a 70% share of the country's booming mobile phone market.

Vivendi involvement with Maroc Telecom dates back to 2000 when it bought its initial stake in the firm for $2.2bn.

Vivendi already has effective control over the company as it owns 51% of the voting rights in the business.

It's an excellent operation Fathallah Oualalou, Moroccan finance minister

However, it will now increase in financial stake in the business.

"This is the result of two to three months of negotiations," Fathallah Oualalou, Morocco's finance minister, told Reuters news agency.

"It is an excellent operation".

Maroc Telecom's partial flotation will be the largest in Morocco's history.

Analysts said that Vivendi's move would alert financial institutions and other investors to the company's prospects and raise interest in the flotation.

Jean-Rene Fourtou, Vivendi's chairman, said the deal marked "a continuation of the already highly successful partnership between the Kingdom of Morocco and Vivendi Universal and opens up new growth avenues for this company and its employees".

Maroc Telecom has more than five million mobile phone customers and a million fixed line residential and business clients.

In 2003, the company generated operating income of 628m euros on sales of 1.4bn euros.