Etisalat extends Zain takeover deadline (UAE)
Etisalat has extended the deadline for its planned purchase of Kuwait Zain’s majority stake for around US$12 billion.
The bid to the shareholders was due to have expired yesterday (15th January), but has been expended to an unspecified time.
According to Etisalat’s statement, both parties continued to work toward the announcement of a definitive transaction but failed to indicate a timeframe for completion for the due diligence. The parties have not made sufficient progress toward completion of the proposed transaction in order to meet that deadline due to unforeseeable delays in Zain providing access to all relevant information.
Etisalat announced its bid to acquire a controlling 46% stake in Zain for almost $12 billion in November 2010.
The prospect of a counter-bid by Turkey based conglomerate, Cukurova emerged last week, although it seems to be only supported by a minority shareholder at the moment.
Çukurova seeks stake in Zain (Turkey, Kuwait)
The Turkish corporation, ‡ukurova, is in talks to acquire a large stake from a minority shareholder in Zain, the Kuwaiti telecoms operator.
The move probably thwarts a record-breaking $12bn bid from Etisalat of the United Arab Emirates.
‡ukurova is in discussions with Al-Fawares Holding, a Kuwaiti company that owns 4.5% of Zain and which opposes the bid from Etisalat, a state-owned telephone company.
The talks initially involved ‡ukurova buying a 29.9% stake in the Kuwaiti operator for US$6.1 billion, but Sheikh Khalifa Ali Al-Sabah, who represents Al-Fawares on Zain’s board, stated that the proposed price and the stake size had changed. There is progress, but there is no binding agreement of any sort, and they are also talking to other interested parties.
The ‡ukurova group, owned by billionaire Mehmet Emin Karamehmet, has a controlling stake in Turkcell but also has interests ranging from media to shipbuilding and oil exploration. The bid for Zain would be a bold move for Mr Karamehmet, who already needs to raise $8 billion to finance the acquisition of Turkish power distribution grids, auctioned at record prices last year in privatizations now under scrutiny from Turkey’s competition authorities.
Turkcell claimed that it had no involvement in the talks. This reflects the relative maturity of the largest markets within the region, the limited growth prospects and the stable cash flow generation of the mobile telecoms sector.
If Etisalat completes its deal with Zain, it will represent the biggest Middle East deal on record.
Alfa case against Cukurova rejected by Court (UK)
www.WirelessFederation.com/news: A court in the British Virgin Islands has rejected Turkish conglomerate Cukurova Holding’s (a shareholder in the country’s largest mobile operator Turkcell) fellow investor Alfa Group’s demands to seize Cukorova’s shares on the grounds that it defaulted on a loan agreement.
13.2% of Turkcell was bought by Russian-based Alfa from Cukurova in November 2005 and lent the Turkish group USD1.71 billion secured against a further 13.8% stake in the operator. It was claimed by Alfa that Cukurova repaid USD357 million in November 2006 but failed to pay subsequent installments on time. Later it made a demand that Cukurova repay its USD1.35 billion debt in the form of Turkcell shares.
According to the court rulings, the payments were not overdue, whilst Alfa had itself violated the terms of the loan agreement and the court also added the Turkcell shares held as collateral would be returned to Cukurova once it repaid its debt to Alfa.
Cukurova to reduce Turkcell stake
Turkcell shareholder Cukurova Group is to sell off 5.88% of its stake in the cellco to raise funds to repay part of a debt owed to Russia’s Alfa group. Alfa paid USD1.59 billion for a 49% stake in Cukurova last year and at the same time provided a USD1.71 billion loan. Cukurova intends to offload the shares to foreign institutional investors. The group currently holds 27% of Turkcell, 13.3% of which is held directly, with the remainder owned via Turkcell Holding, which is a joint venture with TeliaSonera. Turkcell is the country’s largest cellular operator, with 30.8 million subscribers and a 61% market share at the end of September, according to figures from TeleGeography’s GlobalComms database.
Source- telegeography Wireless Mobile Telecom
