A consortium of Indian telecom companies and a Malaysian investor will buy a 46 percent stake in Kuwaiti telecom Zain , an official with major shareholder Kharafi Group said on Tuesday.
The group will pay two Kuwaiti dinars a share in a deal which values the stake in the Arab world''s third largest telecommunications company at about 13.7 billion U.S. dollars, making it one of the biggest overseas acquisitions into the Gulf region.
The consortium is made up of India''s Vavasi Group, regional telecom companies Bharat Sanchar Nigam and Mahanagar Telephone Nigam, and Malaysian billionaire Syed Mokhtar AlـBukhary. The consortium has shown great interest in the recent years in taking over Zain due to the latter''s remarkable successes regionally and internationally.
Kharafi viceـpresident Bader AlـKharafi told a news conference that the deal would take four months to complete.
"The share value includes the fees claimed by the National Investment Company (NIC) for clearing the deal and overseeing its enactment over the coming four months," he pointed out.
"It''s considered a good opportunity to exit the investment," he said when asked why the company was selling its stake. "This deal is considered a profit for both parties."
Kharafi confirmed this week that it was in talks to sell its position in Zain, estimated at about 20 percent, along with other shareholders. "During this period all legal procedures relating to the Kuwait Stock Exchange (KSE) will be completed," AlـKharafi said. Combined, the group held a 46 percent stake.
National Investments Co., owned by the Kharafi Group, said on Monday that one of its portfolio clients, AlـKhair National, had informed it that it was reviewing a sale of the Zain stake.
"The involvement of the small investors in this deal is according to the agreement (between the small investors) and AlـKhair, with the same price," Bader AlـKharafi said on Tuesday, adding that the majority of the other Zain shareholders involved in the deal were small, permanent stakeholders.
"Al Khair group signed to provide 46 percent and God willing we are able to get this percentage."
No decision has been reached on how the stake would be divided among the consortium, Vavasi said, adding that the group had been in discussions for seven months on a potential deal.
No Africa Sale Zain has been in the midst of a strategic review and repeatedly denied rumors that a stake sale was imminent.
The Kuwait firm, renowned for its aggressive acquisition policy, had retained UBS as an advisor and was shopping its African assets, marking an abrupt turnaround from its stated goal of becoming a top ten global telecom player.
Market speculation of a sale had propelled its stock up 53 percent since July 9, to an 11ـmonth closing high on Sept. 6, a day after its chief executive told Reuters it was in early talks to sell a stake in its African operations, minus its Moroccan and Sudanese business.
Talk of a stake sale in Zain itself was also rife, with management saying it was unaware of any such plans. Last month, shareholders voted to scrap individual ownership limits.
Vavasi Telegence''s managing director said on Tuesday that the new shareholders now had no plans to offload the African operations.
"Our plan is to consolidate networks further and roll out larger networks and cover greater markets ... It''s not to sell for sure," Farid Arifuddin said at a news conference.
Arifuddin said there was a good fit between Zain and the Indian companies in the consortium.
"We see a lot of synergy between India ... and the other countries where Zain group is in operation in Africa," he said.
"What we bring to the transaction is our experience especially our prospective partners from India ... They have the experience of operating in low cost countries."
Zain stock has dropped 11.5 percent since Sunday''s close.

Alwatan Daily