Zain continues selling spree

After selling Zain Africa to Bharti Aritel for $10.7 billion months ago, the majority shareholders in Kuwaiti-based Zain have signed preliminary agreement to sell their 46% holdings in the company to the UAE’s Etisalat for around US$12 billion.

Reports monitored from international telecom circles said the transaction has been undergoing due diligence since the proposal was originally announced a couple of months ago.

The formal agreement is between Al-Khair, a company owned by Kuwait’s Kharafi Group, which is leading the sale, and Etisalat.

The Kharafi-controlled National Investments Company of Kuwait told the Kuwaiti Stock Exchange in a statement that  that “due diligence will begin in accordance with rules and regulations applicable by the company, and sale procedures will be executed in accordance with rules and regulations of the Kuwait Stock Exchange.”

As some 10 percent of Zain shares are held as treasury stock, the 46% holding would give Etisalat effective control of the company.

The Kharafi directly owns 12.7% of Zain, but its subsidiaries take its holdings up to around 20 percent.

The Kuwait Investment Authority, the country’s sovereign wealth fund, is Zain’s largest shareholder with 24.6 percent of the company.

By Samuel Dowuona