Etisalat plans three-part bank financing for Zain stake - CFO

Abu Dhabi-based company will also borrow a $3bn loan payable in three years and another $3bn payable in five years
Etisalat plans three-part bank financing for Zain stake - CFO
LOAN DEAL Etisalat has agreement from eighteen international and regional banks on the initial term-sheet for the loan (ITP Images)
By Bloomberg
Sun 23 Jan 2011 01:53 PM

Emirates Telecommunications Corp, the biggest phone company in the United Arab Emirates, plans to finance its $12bn offer for control of Kuwait's Mobile Telecommunications Co, in three stages of loans.

“The first $6bn will be a bridge loan, payable in eighteen months,” chief financial officer Salem Al Sharhan said in a phone interview today. The Abu Dhabi-based company will also borrow $3bn payable in three years and another $3bn payable in five years, he said. The $6bn bridge loan will be refinanced through bonds and sukuks, Al Sharhan said.

The company, also known as Etisalat, has agreement from eighteen international and regional banks on the initial term-sheet for the loan, he said. The majority of the banks are international lenders with four regional players, including Saudi Arabia’s Samba Financial Group, National Bank of Abu Dhabi PJSC, Emirates NBD PJSC, and National Bank of Kuwait, he said.

Etisalat is still in talks to reach an accord on its offer for a 46 percent stake in Mobile Telecommunications, known as Zain and the country’s biggest phone company, after it missed a January 15 deadline. If finalised, the deal will strengthen Etisalat’s presence in the Middle East, where Zain operates in countries from Kuwait and Iraq to Bahrain.

There is a “big chance” that all eighteen banks will be involved in the financing, but the number might still change, said Al Sharhan.

“The next stage will include negotiating with banks the specific terms of the financing and then the prices. We are trying to be prepared so that if the acquisition is finalised the financing will be ready,” said Al Sharhan.

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