Bahraini incumbent Batelco and investment firm Kingdom Holding have called off their joint US$950m offer for 25% of mobile operator Zain Saudi, the companies confirmed.
Their decision came after Zain’s lenders refused to transfer debt guarantees to…
Bahraini incumbent Batelco and investment firm Kingdom Holding have called off their joint US$950m offer for 25% of mobile operator Zain Saudi, the companies confirmed.
Their decision came after Zain’s lenders refused to transfer debt guarantees to them, reported Reuters citing sources.
The bidders had also wanted to inject only US$900m into the group, below requests from the undisclosed bank lenders for a minimum US$1.5bn, added the report.
Batelco, Kingdom and Zain were unable to comment on the speculation before the press deadline.
But in a joint statement earlier today, Batelco and Kingdom said: “The consortium concluded that the terms and conditions as set out in its non binding offer could not be met to its satisfaction.”
Zain was advised by Credit Agricole, while Batelco and Kingdom were respectively advised by Citi and RBS.
The board of Zain Saudi first met the suitors on 16 May 2011, and following due diligence the parties had intended to close a deal before the end of the year.
But in order to have a fully-funded business, Zain Saudi would need to be restructured, obviating the need for debt guarantees – a contentious issue because of the operator’s high debt.
However, it had been suggested that Batelco could take over some shareholder loans as part of an eventual agreement, with rumours pointing to a US$200-250m figure.
Batelco had previously said it would be able to use a combination of internal cash resources and third party debt to fund a deal.
