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Bharti and Zain sign agreement for $10.7 Billion 0

Lagos — Bharti Airtel, India’s largest mobile telecoms operator, and the Zain Group of Kuwait have signed a “definite agreement” for the sale of 100 per cent of Zain’s African assets for an Enterprise Value of $10.7 billion.

The Zain Group, in a statement, disclosed that the sale of the African assets excludes its operations in Morocco and Sudan but includes Nigeria.

According to the statement, the transaction is expected to close as soon as reasonably practicable subject to the satisfaction of certain approvals.

The Chairman and CEO of Bharti Airtel, Sunil Bharti Mittal, in his comments, described the agreement as a landmark for global telecom industry and game changer for Bharti Airtel.

He said the transaction is a pioneering step towards South-South cooperation and strengthening of ties between India and Africa.

The transaction, he said, would enable Bharti Airtel to be transformed into a truly global telecoms company with operations across 18 countries thus fulfilling its vision of building a world-class multinational.

The Bharti CEO also expressed optimism about venturing into the African market which he described as the continent of hope and opportunity.

He revealed that the strength of the Bharti brand, its unique business model and the historical connection of India with Africa would help unlock the potential of these emerging markets.

“Bharti is committed to partnering with the governments in these countries in taking affordable telecoms services to the remotest geographies and bridging the digital divide,” he said.

The Chairman of the Zain Group, Mr Asaad Al Banwan, speaking on the transaction, said: “Since we acquired Celtel in 2005, we have grown substantially to become one of Africa’s leading mobile operators, and we are proud of the contribution Zain Africa has made to the development of communications across the continent. This transaction crystallises the significant value we have created for our shareholders over the last 5 years.”

The transaction, according to the group, “implies an equity value of US$9 billion and consideration will be fully satisfied in cash, of which US$8.3 billion will be paid upon closing and US$0.7 billion will be paid one year from closing, while Bharti Airtel will assume US$1.7 billion of consolidated debt obligations”.

The group added that subject to shareholder approval, the size of available distributable reserves and the repayment of the US$4 billion Revolving Credit Facility, Zain intends to distribute a large proportion of the upfront net proceeds to shareholders in the form of dividends.

Al Banwan credited Bharti Airtel for having a fantastic track record in running successful operations in the emerging markets and expressed delight that the African telecom operations that Zain has built is to be part of a committed and reputable telecom powerhouse like Bharti.

The speedy process leading to the signing, underscores the importance of the deal to both parties.

Continue reading on AllAfrica.com

By Efem Nkanga This Day (Source: AllAfrica.com)

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