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Zain Restarts Talks
on Africa Unit Sale

DUBAI — Kuwaiti telecoms firm Zain is in talks with three international telecom operators, including one from India for the sale of its African operations, according to its chief executive officer. Talks with these companies may result in serious negotiations leading to the partial or complete sale of Zain’s African assets, Saad Al Barrak told Kuwaiti daily newspaper Al Rai.

Zain plans an extraordinary general meeting on August 31 when shareholders will be asked to vote on amending its ownership restrictions. The move would pave the way for selling a large stake in the firm. The current bylaws of the company restrict individual stock holding not to exceed two per cent. Al Barrak told the newspaper that the changes were necessary for the firm to fit in with the competitive nature of Kuwait’s economy, regardless of acquisition talks.

Etisalat is interested in a majority stake of Kuwait’s biggest telecom operator. Its head of international investments said last month that the company would like to acquire a majority stake in Zain.

“In terms Zain’s Africa operations, we believe etialsat would be interested in certain operations and would view the assets on a country by country basis, due to the geographical overlap in some countries especially Nigeria. Zain could potentially split the assets and sell different assets to different operators,” Irfan Ellam, Vice-President, Equity Research at Al Mal Capital, told Khaleej Times on Monday.

Regarding any potential buyer from India as signaled by Zain chief executive, Ellam said it is very difficult to name any operator as there are quite a few big players. The assets would be of potential interest to Bharti Airtel and Relaince Communications, however Bharti Airtel is currently in discussions with MTN of South Africa, and would probably only express serious interest if the negotiations with MTN did not lead to a transaction.

Major telecom players in India include Bharti Telecom, Idea, Tata and Reliance, but India’s Essar Group, which holds a 33 per cent stake in Vodafone’s India operations, has expressed to further its interest in Africa.

In a bid to expand its African footprint, the Essar Group has entered into “exclusive” discussions with the UAE’s Dhabi Group, an investment firm led by the Abu Dhabi royal family, for investing in its African telecom portfolio.

Zain has received several expressions of interest in its African units and the board of directors will consider any proposals that may be submitted, chief executive said.

Zain said last month it was reviewing a possible sale of its African operations, minus Morocco and Sudan, after French media and telecoms giant Vivendi called off talks to buy a majority stake in the African business.

· abdulbasit@khaleejtimes.com

· With inputs from agencies