Zain seeks US$5 billion to fund three African acquisitions

Celtel’s CEO Chris Gabriel has indicated the Zain Group will seek US$5 billion through an IPO listing in an unspecified European stock exchange, thought to be the London bourse, in order to fund the acquisition of three more African operators within a year.

Gabriel told a South African newspaper that Celtel – which will be rebranded Zain Africa in the third quarter of 2008 – is considering opportunities in seven African countries and did not rule out entering the South African market, which may be possible if recent rumours of a fourth mobile licence tender prove to be correct.

Gabriel said the Zain Group had access to plenty of cash, so financing an acquisition would not be an issue.

“The listing on a European stock exchange will provide currency for the organisation but there is no shortage of funds if we find the right acquisition,” he said.

Egypt appears a possible target as it could adjoin Zain’s existing ‘One Network’ of 12 African states allowing borderless roaming.

If such a move occurred, Mobinil could be a possible acquisition following tension between its two main shareholders: Orascom initiated legal action against France Telecom in December owing to disagreement over Mobinil’s company strategy.

However, Ibrahim Adel, chief communications officer at Zain told Comm. that Zain’s immediate focus is a capital raising exercise of US$4 billion, which it hoped to have undertaken in June, but has been delayed by political considerations in Kuwait.

“We have approval but are waiting to receive the official Emiri decree to start the ball rolling on our capital raising exercise,” Adel stated.