India's BSNL to exit Zain takeover talks

India's state-owned BSNL is set to pull out of India-Malaysia consortium over valuation of deal, according to a local press report

Tags: IndiaKuwaitZain - Kuwait
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India's BSNL to exit Zain takeover talks Zain shareholders are in talks with the India-Malaysia consortium to sell a 46% stake in the telco.
By  George Bevir Published  November 19, 2009

One of the parties involved in talks to acquire Kuwaiti telecoms giant Zain is on the verge of pulling out of the deal, according to a local press report.

India's Business Standard said yesterday that state-owned Bharat Sanchar Nigam (BSNL) is likely to exit the consortium of India's Vavasi Group and Malaysia's Al-Bukhary, which is looking to acquire a 46% stake in Zain for a reported US$13.7 billion.

It is claimed that talks have fallen through over valuations and that Vavasi is expected to announce a new consortium partner in a week or two.

Zain's shareholders paved the way for a sale of the telecom operator when they voted to lift a cap on the foreign ownership of shares, after talks with French media giant Vivendi over a partial sale of Zain's assets were called off in July.

It was suggested in September that due diligence was taking place with the consortium reported to be pouring over Zain's books, a claim which was later denied. 

Earlier this month two of Zain shareholders filed law suits to challenge the deal, casting doubt on the sale.

Separately, at the start of this week Zain announced that profit across the group had fallen by 52.8%, which CEO Saad Al-Barrak attributed to currency fluctuations and higher financing costs.

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