Zain Board declines Batelco offer for Zain Saudi stake (Kuwait)
Kuwait’s biggest phone operator, Zain has reportedly turned down an offer from Bahrain Telecommunications Co. to acquire its 25% stake in Zain Saudi Arabia.
As per sources, Batelco’s offer was below the book value of the stake. Batelco, Bahrain’s largest phone company stated on Feb. 9 that it submitted to an offer to acquire Zain Group’s stake in Zain Saudi. Zain’s board met today to decide on the offer. The meeting followed an announcement by Kingdom Holding Co. that it has not reached an agreement with Zain to buy its stake in Zain Saudi. Kingdom Holding, controlled by Saudi billionaire, Prince Alwaleed bin Talal, made an offer on Jan. 31.
Zain Saudi shares today fell by 4.3% in Riyadh to US$2.06, valuing the company at US$2.9 billion. The stock has declined 22% in the past year.
Zain’s board decision may frustrate a bid by Emirates Telecommunications Corp. to buy a 46% controlling stake in Zain. Etisalat is in talks with Zain shareholders to buy a majority stake in the Kuwaiti company. It has stated that Zain needs to sell its stake in the Saudi unit in a timely fashion for the deal to proceed.
Zain Saudi Arabia minimizes loss by 21%
Zain Saudi Arabia has announced that it has recorded significantly higher revenue for the 2010 fourth quarter with an increase of 93% to US$460 million, compared to revenue of US$238 million for the fourth quarter of 2009.
Operating losses for the fourth quarter decreased significantly by 58% to US$47.6 million compared to losses of US$115.7 million in the fourth quarter of 2009.
The net loss for the period shrank by 21% to US$138.6 million compared to a net loss of US$4174.7 million for the fourth quarter of 2009.
According to his Royal Highness Prince Dr. Husam bin Saud bin Abdul Aziz, Chairman of Zain Saudi, the fourth quarter results for Zain Saudi show a number of positive signals for the company’s future and they demonstrate Zain Saudi’s continuing ability to differentiate itself in the Saudi market. These positives are due to the efforts of the Zain team. Their creativity and efficiency has built a strategic base for the company to grow significantly. The ability to grow the returns more than expected demonstrates Zain Saudi’s continuing ability to differentiate itself in the highly competitive and saturated Saudi communications market.
The chairman also noted that Zain’s customers’ base exceeded 8 million by the end of December 2010s.
The Zain CEO also mentioned that Zain Saudi have reached another milestone by reaching the break-even point at the level of profit before interest on its Murabaha loan, taxes and depreciation (EBITDA) for the year ended 2010 ahead of initial expectations.
Saudi Mobily net profit rises in Q3
Mobily, Saudi Arabia’s second-biggest telecom operator, placed a better-than-expected 41% rise in quarterly profits, assisted by a fall in the cost of international networks and higher broadband revenues.
Mobily, a.k.a. Etihad Etisalat, made US$303.5 million in the three months to Sept. 30, up compared to the previous year.
It was the highest quarterly net profit for Mobily, which competes with state-controlled Saudi Telecom and Zain Saudi Arabia, while it started up as the kingdom’s second mobile phone operator five years ago.
Mobily benefits from its affiliation with Emirates Telecommunications, its biggest shareholder, with a 27.4% stake, which grants it cost-competitive access to networks partially or wholly owned by the UAE-based firm.
Total revenues for the quarter rose 13.6% to US$1.06 billion on a year earlier, but only inched up from US$1.05 billion for the second quarter. Net operating income in the third quarter rose 38% to US$317.33 million.
Earnings per share for the nine months to end-September stood at US$1.04, up from US$0.74 a year earlier and US$0.61 in the first half of 2010.
Zain Saudi Arabia to launch by mid-2008 (Saudi Arabia)
Saudi Arabia’s third cellular operator, Zain, is expecting to launch in the first half of next year. The firm’s CEO, Marwan Al Ahmadi, says there is no intention of starting a price war with the country’s two existing cellcos, STC and Mobily, ITPnet reports. Al Ahmadi adds that he expects cellular penetration in Saudi Arabia to reach 100% by 2010. Zain Saudi Arabia is part-owned by the Kuwait-based Zain group, which was formerly known as MTC. STC and Mobily were serving more than 22 million subscribers at the end of June.
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