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Tue 1 Feb 2011 04:59 PM

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Alwaleed's Kingdom in bank talks on Zain Saudi financing

Kingdom Holding says it made a non-binding offer for the 25% stake in Zain Saudi, valued at $733m

Alwaleed's Kingdom in bank talks on Zain Saudi financing
Alwaleed's Kingdom in bank talks on Zain Saudi financing
TELCO PLANS Zain has said it is studying the Kingdom offer which expires on February 6 (Bloomberg Images)

Kingdom Holding, HRH Saudi Prince Alwaleed Bin Talal's investment firm, is in financing talks with banks for its proposed acquisition of Zain's Saudi assets, a Kingdom executive said on Tuesday.

Ahmed Halawani, Kingdom's executive director of private equity, made the remarks in Arabic language daily Asharq Al Awsat.

Kingdom said on Monday that it made a non-binding offer for the 25-percent stake in Zain Saudi, valued at SR2.75bn ($733m), which Zain must sell to complete a deal with UAE's Etisalat.

Halawani said the telecoms sector is an important one for Kingdom which has unsuccessfully bid for Saudi licences in the past.

"We see now Zain's withdrawal (from Saudi), because of the deal, gave us the chance to contact them and try and be one of the companies that will buy their share in Saudi Zain," he was quoted as saying.

Etisalat, the Gulf's second-biggest telecoms firm, bid $12bn for a controlling 46 percent stake in Zain last year but wants the Zain Saudi stake sold to satisfy regulatory concerns because of its own operation in Saudi Arabia - Etihad Etisalat Mobily.

Kingdom's is the first formal offer for the Zain Saudi stake though other parties have expressed interest including Bahrain Telecommunications.

Kingdom did not say how much it had offered for the stake. Zain has said it is studying the offer which expires on February 6.

Halawani said part of the deal will be financed through the company's capital and the rest through bank financing.

He said there were negotiations with several banks and Kingdom is close to an agreement with one bank in particular, which he did not name.

"No final agreement has been reached with the bank," Halawani was quoted as saying.

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