Kuwait's Zain has upped its stake in its Bahraini subsidiary to 63 percent after buying a further 6.25 percent for $12.5 million, the telecom firm said, allowing it to retain majority control after the unit's stock market listing.
The acquisition values Zain Bahrain, which must sell 15 percent of its shares in an initial public offering (IPO) and list on Bahrain's bourse as stipulated by its licence terms, at $200 million.
Zain said in a statement on Wednesday that it had bought the stake from "other shareholders" without elaborating. It did not explain why it had done the deal, but in December Chief Executive Scott Gegenheimersaid his company wanted to retain majority control of the subsidiary.
Zain previously held a 56.25 percent stake in Zain Bahrain, so selling the IPO on a proportional basis would have led the Kuwaiti firm's stake to drop below 50 percent. Upping its holding to 63 percent ahead of the IPO has removed that danger.
In February, an industry source told Reuters that Zain Bahrain aimed to launch the share sale by the end of June.
As of April 2013, Zain Bahrain's shareholders included Zain Bahrain Chairman Sheikh Ahmed bin Ali Abdulla al-Khalifa, who held 16.3 percent, according to research by Zawya, a Thomson Reuters company. Vodafone and a government pension fund owned 6.1 and 4.7 percent respectively.
Gulf countries often stipulate in telecom licences that operators list on the local stock market to help diversify the bourse.For all the latest tech news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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