Kuwait-based Zain is expected to remain up for sale despite the death of major shareholder Nasser al-Kharafi, the chairman of the Kharafi group, Reuters reports.
Kharafi, 67, died on Sunday in Cairo from a heart attack.
The Kharafi group was leading a…
Kuwait-based Zain is expected to remain up for sale despite the death of major shareholder Nasser al-Kharafi, the chairman of the Kharafi group, Reuters reports.
Kharafi, 67, died on Sunday in Cairo from a heart attack.
The Kharafi group was leading a consortium that wanted to sell 46% of Zain for US$12bn to UAE-based Etisalat. But Etisalat pulled out earlier this month after it was put off by expected changes to Kuwaiti capital market rules, which will force buyers of over 30% stakes to bid for the remaining shares. It was also said to have found something it did not like in due diligence.
Al Mal Capital vice president Irfan Ellam was quoted saying in Reuters that Zain was likely to still be up for sale although it would depend on Kharafi’s successor and the financial situation of the Kharafi Group, which may need to sell assets to reduce its debt pile of a reported US$5bn.
TelecomFinance understands that talks with Etisalat may resume, though at a lower price, now that the problem of a disunited board has been removed.
Indeed, last week, Sheik Khalifa, who had been a strong opponent of the sale of Zain to Etisalat, was not re-elected on Zain’s board at the AGM/EGM. Neither was Sheika Aida.
They will be replaced by Bader Al Kharafi, the son of Nasser Al-Kharafi, and Sheikha Al Baher, of the National Bank of Kuwait (NBK). The NBK is part of the Kharafi Group.
The new board still has to meet in order to confirm the new chairman and the deputy chairman.
But it is understood that the most likely scenario remains a break-up of the company, although the sale of Zain’s Saudi unit is looking shaky as Batelco’s financing possibilities remain unclear.
On March 13, Zain’s board approved a joint non-binding offer of US$950m from Kingdom Holding Company (KHC) and Batelco for its 25% stake in local mobile operator Zain KSA.
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.
