Zain acquisition to be completed in four months

Leading investors in Zain Group have signed an agreement with a Malaysian-Indian consortium for the sale of a 46 per cent stake in the Kuwait mobile operator. The consortium consists of Malaysia’s Al-Bukhari Group and India’s Bharat Sanchar Nigam Ltd. (BSNL), India’s largest communications service provider, Mahanagar Telephone Nigam Ltd. and Vavasi Group.

Bader Al-Khorafi, a top executive of Kuwait’s Al-Khorafi Group, the largest private shareholder in Zain, told a press conference earlier in the month that the sale would be carried out within four months. He said the value of the sale, expected to be around US$14 billion, would be paid in one time in according with Kuwait Stock Exchange rules. Kuwait’s National Investments Co. is arranging the deal on behalf of the Kuwaiti investors, he said

The sale of the stock is set for a price of KWD 2 (US$ 7.10) per share, representing a premium of around 45 per cent.

The government owns the largest stake in Zain, amounting to 24.6 per cent. The 46 percent of shares would give buyers a controlling stake in Zain since 10 percent of the shares are held by the board of directors in the form of treasury shares, which do not enjoy voting rights.

Farid Arifuddin, managing director of Vavasi Telegence, which is part of India’s Vavasi Group, said the new shareholders did not plan to offload the African operations. “The consortium will not sell its African assets,” a Vavasi official said. “Our plan is to consolidate networks further and roll out larger networks and cover greater markets… It’s not to sell for sure,” he said at a news conference.