Zain signs binding agreement with Bharti
Zain signs "definitive agreements" for sale of its African assets to Bharti Airtel for $10.7 billion.
Zain yesterday signed definitive agreements for the sale of its African business, excluding its operations in Morocco and Sudan, to Bharti Airtel for $10.7 billion.
The Kuwaiti telco confirmed that it will receive $9 billion in cash from Bharti, of which $8.3 billion will be paid upon closing and $700 million one year after closing. Bharti will also assume $1.7 billion of debt obligations.
Completion of the deal depends on "the satisfaction of certain approvals" according to a statement from Zain, although the company's chairman, Asaad al-Banwan, told Al Arabiya television in a recent interview that it could take "weeks or months" for the transfer of assets to Bharti.
The development follows an announcement from Zain and Bharti last week that both parties had completed due diligence for the deal. It was also reported last week that Bharti had secured $8.3 billion needed to underwrite the deal.
Once the deal is complete, Zain intends to distribute a "large proportion" of the upfront proceeds of the deal to its shareholders.
Nabeel Bin Salamah, CEO, Zain Group, said the transaction will allow Zain to focus on its "highly cash generative operations in the Middle East" and to improve its balance sheet. "We are excited about the growth prospects of the Middle East and we believe Zain is well positioned to capture this opportunity," he said in a statement.
The deal will make Bharti, which launched mobile services in India in 1995, the world's fifth biggest mobile carrier, with a total total customer base of around 179 million in 18 countries across South Asia and Africa.