The board of Kuwaiti operator Zain approved a joint nonbinding offer from Kingdom Holding Company (KHC) and Batelco for its 25% stake in local mobile operator Zain KSA on March 13.
Batelco stated that the consortium had offered US$950m in cash, subject…
The board of Kuwaiti operator Zain approved a joint nonbinding offer from Kingdom Holding Company (KHC) and Batelco for its 25% stake in local mobile operator Zain KSA on March 13.
Batelco stated that the consortium had offered US$950m in cash, subject to the findings of the due diligence and other approvals which could take at least six weeks. It added that the offer did not include Zain KSA’s US$3.8bn debt.
Zain had previously rejected separate offers from Kingdom Holding and Batelco as well as from another Saudi investment company, Riyadh Group.
The agreement had been a key condition to Etisalat’s nowabandoned US$11.7bn acquisition of 46% of Zain, since Etisalat already operates in the country through its unit Mobily.
Kingdom Holding, owned by Saudi billionaire Prince Alwaleed bin Talal, is advised by RBS while Batelco is advised by Citi.
Credit Agricole is advising Zain.
Batelco is already present in Saudi Arabia through its 15% stake in fixed-line operator Saudi Atheeb.
SUBHEAD But what about the debt?
What was certainly unclear was whether Batelco and Kingdom had agreed to guarantee part of Zain KSA’s US$3.8bn in debt.
Zain certainly thought so: “Guarantees will be settled and ended as part of transferring the ownership, and restructuring Zain Saudi,” according to a translation of its original statement to the Saudi bourse.
Later, Zain valued the deal at US$1.2bn, adding that the buyers would guarantee part of KSA’s debt and invest some of their own money in the business.
However, Kingdom Holding issued its own statement clarifying that it and Batelco would pay US$950m in cash, and that Zain KSA would become an independent company with no guarantee Financing Working to dispel doubts that Batelco would be able to raise financing, CEO Peter Kaliaropoulos stated: “Events in the last few weeks may increase in the short term the cost for such financing, but based on feedback from GCC and international banks, there is healthy interest and a competitive spirit from banking partners to deliver the required financing.” Kingdom certainly seemed confident in its partnership with Batelco, with the prince declaring: “Our confidence in the leadership of Bahrain is infinite”.
