In order to establish a joint venture (JV) with an initial capital of $10 million, South Korean multi-cloud solution provider Bespin Global and UAE telecom firm Etisalat (e&) have signed a legally binding agreement. According to a report made by the telecom business to the Abu Dhabi Securities Exchange (ADX) on Friday, Bespin Global will control 35% of the JV, which will be known as Bespin Global MEA, while e& enterprise will own 65% of it. The capital contributions will be made proportionately.
Under the agreement, the UAE telecom company can potentially unlock further collaboration with existing Bespin Global’s shareholders by making a primary investment of $60 million in Bespin Global in exchange for a stake of about 10%.
In addition, e& has the option to invest another $60 million at the same valuation within a period of 18 months from completion of the transaction. Also, e& is committed to provide the JV an additional funding of up to $40 million, in the form of shareholder loans, to finance the growth of the business.
The investments will be paid in cash, e& said.
Upon completion of the transaction, the JV will be consolidated into e&’s financials.
It will offer public cloud managed and professional services in the Middle East, Turkey, Africa and Pakistan (METAP).
The move to form the JV is in line with the company’s “strategic ambition of scaling up the e& enterprise vertical and enhancing its digital capabilities,” according to the statement.
Earlier this week, Etisalat increased its stake in Britain’s Vodafone Group to 11% of the UK mobile phone company.
