Zain confirms deal to sell African assets
MWC: Zain deal provokes mixed reaction from attendees at Barcelona´s Mobile World Congress
Mobile World Congress, Barcelona: Kuwaiti telco Zain confirmed that it has accepted an offer from Bharti Airtel for its African assets, excluding Morocco and Sudan.
The company said that it expects to make a return of some $5 billion from the deal, which will see Bharti Airtel pay $10 billion on completion of the deal, followed by $700 million one year after signing the agreement, according to a statement Zain posted on the Kuwait Stock Exchange.
The development follows closely from Zain´s appointment of former Kuwaiti communications minister Nabeel Bin Salama as its new CEO, following the resignation of Saad Al Barrak. When Zain appointed Bin Salam last week, the company indicated that he would focus on benefiting shareholder value.
The sale of the African deal already appears to have moved towards fulfilling that aim, with Zain's share price lifting by almost 10% following the announcement of the deal.
Zain has been the focus of numerous discussions on the sidelines of this week's Mobile World Congress. One senior manager of a leading vendor close to Zain told itp.net that decisions made by Zain in the past few years had weighed heavily on the company's balance sheet. He said that the company's decision to pay $6.1 billion for Saudi Arabia's third mobile-phone network license in March 2007 was likely to "never pay off", owing to the high cost of the licence and the amount of competition in Saudi Arabia.
Meanwhile, an analyst from IDC also speculated whether Bharti Airtel would be able to maintain the current roaming rates that Zain has created under its "One Network" project once it takes over the African operations.