Fawares Holding, which owns about 4.5% of Kuwait-based operator Zain, has filed a lawsuit in Kuwait to try and prevent the company from selling a subsidiary and opening its books to UAE-based rival Etisalat, according to the Financial Times.
The investor…
Fawares Holding, which owns about 4.5% of Kuwait-based operator Zain, has filed a lawsuit in Kuwait to try and prevent the company from selling a subsidiary and opening its books to UAE-based rival Etisalat, according to the Financial Times.
The investor is reportedly looking to stop the sale to Etisalat of a 46% stake in Zain for US$12bn.
The report added that Ali Mousa, chairman of Securities Group, which represents some Zain shareholders, said that the latter would not sell their shares to Etisalat and were also opposed to the sale of Zain Saudi Arabia, a requirement for Etisalat’s acquisition of the Zain Group.
Etisalat registered an interest in Zain in September after discussions with one of the Kuwaiti telco’s primary shareholders, the al-Kharafi group. The process has now moved on to the due diligence phase with Etisalat setting a deadline of 15 January for definitive transaction documents to be in place.
Al-Kharafi told Reuters that despite legal obstacles and Etisalat’s challenge to borrow the requisite US$12bn to buy the firm, the deal will go ahead.
Etisalat is in negotiations with a cabal of bankers to raise the money and has swapped term sheets on a US$6bn bridging loan and two US$3bn loan tranches – one over three years and one over five years – with 10 banks.
