Preliminary agreement will make all sides liable to pay undisclosed break fee if they back out of deal
Kuwaiti telecoms operator Zain
will sign a preliminary contract to sell a stake in
affiliate Zain Saudi for $950m by early next
week, a Zain source said on Sunday.
The preliminary agreement will make all sides liable to pay
an undisclosed break fee if they back out of the deal, the
The Saudi stake sale had been a prerequisite of Etisalat's
$12bn takeover of Zain.
Although Etisalat withdrew its offer on Saturday, Zain will
still sell its quarter-stake in Zain Saudi to joint bidders
Kingdom Holding and Bahrain Telecommunications Co (Batelco), the source said.
"The preliminary contract will be signed within the end of
this week or beginning of next week, because the banks
[creditors] have to see if they will accept transferring the
guarantees from Zain to the alliance," the source said.
Kingdom and Batelco agreed to guarantee part of Zain
Saudi's debt last week.
Zain Saudi's shares are up 1.4 percent, underperforming
Saudi Arabia's index TASI which is up 4.3 percent.