UAE telecommunications company e&, formerly known as Etisalat, has announced the sale of its 40 percent stake in Khazna Data Center Holdings for AED8 billion ($2.2 billion) to the Abu Dhabi technology group G42. This significant transaction, reported in a statement to the Abu Dhabi bourse, is expected to generate a capital gain of AED5.1 billion ($1.4 billion) before accounting for federal royalty and corporate tax.

The proceeds from this sale will be utilized to reduce e&’s debt, thereby enhancing its financial standing and credit profile. e& acquired the 40 percent stake in Khazna in 2022, while G42 retains ownership of the remaining 60 percent.

Khazna, based in Dubai, specializes in the development of wholesale data centers and has indicated that the technology investment company MGX and the US private equity firm Silver Lake will join as minority investors. According to Hassan Alnaqbi, CEO of Khazna, demand for data centers is increasing across the Mena region, which he described as “underserved.”

Currently, Khazna operates 14 data centers and has 10 to 12 more under construction, with plans for an additional four centers. Despite the divestment, e& will continue as a strategic partner and a “major tenant” of Khazna.

Following the announcement, shares of e& listed on the Abu Dhabi exchange rose by 0.4 percent, closing at AED16.78. Despite a 9 percent drop in stock value this year, the company has seen a 2.8 percent increase since the beginning of the year.