Kuwait’s Zain has completed the sale of 15 African mobile phone operators to India’s Bharti Airtel in a US$10.7bn deal.
Zain, which built up massive debts in an acquisition spree between 2003 and 2007, will use the funds to repay a US$4bn revolving…
Kuwait’s Zain has completed the sale of 15 African mobile phone operators to India’s Bharti Airtel in a US$10.7bn deal.
Zain, which built up massive debts in an acquisition spree between 2003 and 2007, will use the funds to repay a US$4bn revolving credit facility and to return money to shareholders.
Bharti Airtel will immediately give Zain US$8.3bn in cash for the businesses and a further US$700m in one year’s time. Bharti is also taking on US$1.7bn of the African businesses’ debts giving the deal an enterprise value of US$10.7bn.
Zain will transfer the ownership of operators in 15 countries: Burkina Faso, Chad, Congo, Democratic Republic of Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda and Zambia.
The Kuwaiti company will keep its businesses in seven Arab countries: Bahrain, Iraq, Jordan, Kuwait, Morocco, Saudi Arabia and Sudan.
Nabeel Bin Salamah, chief executive officer of Zain, said, “The transaction allows Zain to focus on its highly cash-generative operations in the Middle East and to substantially improve its balance sheet.”
Zain will soon publish its full-year financial results for 2009, which it had postponed while it waited for the sale of the African businesses.
UBS was Zain’s lead financial adviser, while BNP Paribas acted as co-adviser on the deal.
Standard Chartered Bank and Barclays Capital advised Bharti. Global Investment House acted as regional adviser to the Indian firm.