Kuwait’s Zain closes African sale to India’s Bharti
Zain CEO Nabil bin Salamah announces the completion of the sale of Kuwait's largest mobile operator's operations in 15 African countries to India's Bharti Airtel for 10.7 billion dollars (9 billion euros), during a press conference in Kuwait City on June 8, 2010. Photo/AFP
Kuwait’s Zain telecom said on Tuesday it has completed the sale of its operations in 15 African nations to India’s Bharti Airtel for $10.7 billion dollars (Sh856 billion).
Kuwait’s largest mobile operator said it has already received $7.87 billion as part of the “largest telecom deal in Africa and the Middle East,” and will receive $400 million more within 12 months, after completing “certain official requirements.”
Zain will also receive another $700 million one year from now.
“I announce here today that we have completed the deal to sell African operations to Bharti Airtel,” Zain CEO Nabil bin Salamah told a news conference.
The sale does not include the company’s units in Sudan and Morocco.
The value of the deal which was signed on March 30 includes $1.7 billion of debt that will be assumed by Bharti Airtel.
Zain, in which the Kuwaiti government holds a 24.6 per cent stake, expects to post a net profit of $3.3 billion from the sale.
“This is a historic deal. It is the largest transaction in the telecom sector in Africa and the Middle East,” Zain chairman Asaad al-Banwan said in a statement.
Salamah said Zain repaid a four-billion-dollar revolving credit facility to over 60 local and international banks after receiving the value of the deal.
He said that Zain and Bharti Airtel, India’s largest phone operator, today “completed all the procedures regarding the transfer of assets,” but added that certain “small” official requirements remained.
“We have completed the transfer of stocks in the 15 African units from Zain to Bharti this morning,” said Salamah, adding that profit from the deal will appear in the company’s financial results in the second quarter.
Most of the profits will, however, be distributed to shareholders as part of the 2010 profit, he said.
The deal marks an official departure of Kuwait’s largest listed firm from its previous strategy of becoming one of the top 10 global telecom firms by 2011, advocated by its former CEO Saad al-Barrak who resigned in February.
On the other hand, the deal made Bharti Airtel one of the top five telecom firms in the world, with around 180 million subscribers.
