Zain KSA sale still on - source
Zain Group remains committed to selling its stake in Zain Saudi Arabia to Batelco and Kingdom Holding Company.
Zain Group will sign a preliminary contract to sell its 25% stake in Zain Saudi Arabia for $950 million by early next week, according to a report from Reuters, which quoted an unnamed source.
The preliminary agreement will make all sides liable to pay an undisclosed break fee if they back out of the deal, the report indicated.
Zain Group last week accepted a non-binding offer from Batelco and Kingdom Holding Company (KHC) to buy its stake in Saudi Arabia, but doubt had been cast on the deal after UAE telco Etisalat scrapped its plan to acquire a 46% stake in Zain Group. The sale of the Zain Saudi Arabia stake was a pre-requisite for Etisalat's acquisition of Zain Group.
Meanwhile, Peter Kaliaropoulos, CEO, Batelco Group, confirmed that the telco was confident of its ability to raise debt up to $1.2 billion to fund the acquisition of the stake in Zain Saudi Arabia.
Kaliaropoulos' comments were made in response to reports that the company would struggle to raise the necessary funds for the deal amid political unrest in the region.
"I would like to express our complete surprise on such highly speculative, unfounded and erroneous comments," Kaliaropoulos said.
"Batelco delivered in 2010, $387 million in EBITDA and $289 million cashflow. Batelco, as at 28 February 2011 had effectively zero debt on its balance sheet."