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Wed 16 Mar 2011 11:36 AM

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Kingdom, Batelco accept Zain's terms for Saudi stake

Zain says Kingdom, Batelco to pay $950m; additional $250m to be paid by Zain Saudi

Kingdom, Batelco accept Zain's terms for Saudi stake
STAKE SALE: Kuwaiti telco Zain said Kingdom Holding and Bahrain Telecom (Batelco) agreed to guarantee part of Zain Saudis debt as a term to buy a quarter-stake in the Saudi operator (Getty Images)

Kuwaiti telco Zain said Kingdom Holding and Bahrain Telecom (Batelco) agreed
to guarantee part of Zain Saudi's debt as a term to buy a quarter-stake in the
Saudi operator.

"Guarantees will be settled and ended as
part of transferring the ownership, and restructuring Zain Saudi," Zain
said in a statement on the Kuwaiti bourse website on Wednesday.

After saying that the offer stands at $1.2bn
for the Saudi assets on Tuesday, Zain clarified in a statement on Wednesday
that it will get $950m in cash from Kingdom and Batelco, and the additional
$250m will be paid by Zain Saudi, and not by the buyers.

On Tuesday, Zain said the consortium led by
Kingdom and Batelco would have to guarantee part of Zain Saudi's debt and
infuse more money to the Saudi operator.

Kingdom Holding had earlier said Zain's board had approved a $950m offer for
its Saudi assets, removing a regulatory hurdle for the Kuwaiti telco's $12bn
stake sale to UAE's Etisalat.

In a separate statement on Wednesday, Kingdom Holding said that the cash
offer for the stake remains at $950m, adding that Zain Saudi will be treated as
an independent firm with no guarantees from third parties when the deal is
done.

Zain must sell its quarter stake in Zain
Saudi as part of a regulatory requirement to avoid an overlap with Etisalat,
which also operates in the kingdom through affiliate Mobily.

The Etisalat deal has been plagued by
delays, including a lawsuit from unhappy Zain shareholders, and the Abu
Dhabi-based telco has twice extended a self-imposed January 15 deadline to
finish due diligence. Etisalat reiterated earlier this month it was still
interested in the Kuwaiti firm.

 

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