Zain concludes the sale of its African operations to Bharti Airtel

8 June 2010:

Zain a leading telecommunications operator across the Middle East and Africa, providing mobile voice and data services to over 31.4 million active customers as at 31 March 2010 with a commercial presence in 8 countries. Zain operates in the following countries: Bahrain, Iraq, Jordan, Kuwait, Saudi Arabia and Sudan. In Lebanon, the company manages ‘mtc-touch’ on behalf of the government. In Morocco, Zain has a stake in Wana Telecom through a joint venture.

Zain,Corporate HQ,Kuwait


However, the company has been involved in several sales and buys off in recent past; this has prompted its evolving and change of corporate identity time without number, from Econet, Vmobile, Celtel etc

Zain,Lagos Corporate office,Nigeria

This month, Mobile Telecommunications Company KSC (“Zain”) announced that it has now satisfied all required conditions precedent to closing of the sale of 100% of Zain Africa BV (“Zain Africa”) to Bharti Airtel Limited (“Bharti”). This transaction values Zain’s African portfolio (excluding Sudan and Morocco) at US$10.7 billion on an enterprise basis.

This transaction has resulted in aggregate net cash proceeds of US$8.968 billion. As at 8th June 2010, Zain confirms that it has received US$7.868 billion of cash proceeds from Bharti. Over the next 6 months, Zain expects to receive up to an additional US$400 million upon certain milestones being achieved. The balance of US$700 million is due one year from completion as per the original agreements signed on 30th March 2010.

In fulfillment of its debt obligations, Zain has repaid the US$4 billion Revolving Credit Facility which the company entered into in July 2006. Going forward, Zain intends to utilise the remaining proceeds to pay dividends and to attend to other corporate matters.

Under the terms of the original agreements, Zain has licensed the use of the “Zain” brand and related trademarks to Bharti in all 15 African operations for an interim period.

Commenting on the sale, Mr Asaad Al Banwan, Chairman of the Board of Directors of Zain, said: “This sale crystallizes the significant value we have created for our shareholders over the last five years. The Board of Directors will consider the best use of the remaining proceeds to further enhance value for all stakeholders."

Mr. Al Banwan added: “We express our sincere appreciation to the Governments, regulators, customers and employees in the respective African jurisdictions for allowing us to play a vital role in the development of telecommunications infrastructure. Our experience in Sub Saharan Africa has been a rewarding one for us and, we believe, for the populace of the countries that supported our journey. The driving principle of our interactions in all countries in which we operate in is to always be the exemplary corporate citizen. This is what drove us to help develop the economies of the markets we operate in and, in the process, reap the benefits for all stakeholders. We will always have fond memories of this experience and particularly of our Zain family in Africa. They have made this success possible. We are certain that Bharti will rely on their capabilities and dedication and will lead them to further success. We wholeheartedly wish Bharti great success in continuing the development of telecommunications across the African continent.”

Mr. Nabeel Bin Salamah, CEO, Zain Group, said: “Zain stands at the threshold of a new era, one that will allow the company to focus on its highly cash generative Middle Eastern operations, investing in new growth opportunities in our existing markets.

Mr. Nabeel Bin Salamah, added: “Zain commends its management team for executing this record transaction of this scale, magnitude and complexity to a very demanding timeline in an expeditious fashion.”

Mr. Sunil Bharti Mittal, Chairman and Managing Director, Bharti said, “We are delighted at the closure of this transformational deal. We would like to express our deep gratitude and thank the governments of all the fifteen African countries and the Zain management team for their overwhelming support to this landmark event which enabled us to close this transaction in a record time.”

UBS Investment Bank acted as lead financial advisor while BNP Paribas acted as co-advisor to Zain on this transaction. Linklaters acted as Legal Adviser for Zain in this transaction.