Kuwait's Zain telecom said it will post a net profit of 3.3 billion dollars from the sale of its African operations to India's Bharti Airtel for 10.7 billion dollars. Zain in a statement posted on the Kuwait Stock Exchange website said it expects to add the profit to its results in the second quarter of the year.
The company last month had expected to post returns of "up to five billion dollars," from selling operations in 15 African nations. Zain units in Sudan and Morocco are excluded.
Zain and Bharti Airtel on March 30, signed definitive agreements for the sale of the African operations and are expected to close the deal shortly after completing necessary regulatory approvals. Zain said the transaction stipulates that Bharti pay nine billion dollars, of which 8.3 billion dollars will be handed over on closing of the deal while 700 million dollars will be paid one year from closing. Bharti Airtel will also assume 1.7 billion dollars of consolidated debt obligations, Zain said in the bourse statement. Zain will pay around 4.2 billion dollars of revolving credit facility and provisions, the statement said.
In statements following the signing of the agreement, CEO Nabeel Bin Salamah said the deal allows Zain to focus on its highly cash generative operations in the Middle East and to substantially improve its balance sheet.
UBS Investment Bank acted as lead financial advisor and BNP Paribas acted as co-advisor to Zain in relation to the transaction. Since the announcement of the deal early February, Zain's share price surged by about 59 percent to 1.4 dinars (5.9 dollars).
The deal also means that Zain's customer base will shrink to just under 30 million from 72 million. It will have operations in Kuwait, Saudi Arabia, Bahrain, Jordan, Iraq, Lebanon, Sudan and Morocco.
Comments
Comments are closed for this article.