Etisalat may cut Zain stake buy (UAE)
Etisalat may be set to lower the share size of Zain to 40% after shareholder opposition threatened to delay the sale. The company had originally proposed to buy 46% of the shares.
Objections from shareholders outside the consortium had threatened to block the transaction from going through.
Al Fawares Holding, which owns a 4.5% stake in Zain, took legal action to halt the due diligence in the planned sale, although a ruling was not due until 22nd December.
According to Etisalat, the purchase would extend its reach in the Middle East, where Zain operates in countries from Kuwait and Iraq to Bahrain. Etisalat offers phone services in 18 countries in the Middle East, Africa and Asia, counting more than 100 million customers, according to its website. The seven emirates comprising the UAE make up about 86% of Etisalat’s sales.
Tech Mahindra to begin Bharti’s African outsourcing services
India’s Tech Mahindra Ltd. expects to start offering call center services to Bharti Airtel Ltd.’s operations in six African countries from Feb. 1.
Earlier this year, Bharti Airtel had selected Tech Mahindra–along with International Business Machines Corp. and Spanco Ltd.–to provide business process outsourcing (BPO), services to the carrier’s operations in 16 African countries.
According to Sujit Bakshi, President, Corporate Affairs and BPO, under the five-year deal, Tech Mahindra will offer core customer service functions such as call centers and back offices in Zambia, Gabon, Ghana, Malawi, Congo DRC, Congo B. The deal didn’t involve making any upfront payment to account for cost savings that may accrue to Bharti.
Tech Mahindra’s BPO division accounted for 5.8% of the company’s US$990.06 million total revenue in the last fiscal year ended March 31. The segment employed 8,489 people at the end of the September quarter.
Bharti entered the African market through a $9 billion acquisition of Kuwait-based Mobile Telecommunications Co.’s assets in the continent in a bid to expand its business to offset the effects of stiff competition in India. The company has about 45 million subscribers in Africa, where the average telecom penetration is lower than India, and aims to achieve 100 million subscribers by 2012.
According to Bakshi, as part of the deal, Tech Mahindra will take over about 2,000 employees on the rolls of Zain and on contract and hire more staff locally to offer services in the six countries. Zain has about 4,500 employees in the 16 African countries, including sales personnel. Tech Mahindra is also targeting additional revenue streams from the telecom operator as it adds new subscribers and from new lines of services that Zain will offer.
As per the contract, which runs in two phases, Tech Mahindra will operate from Zain’s premises in the first phase and will take over the premises and also operate from its own centers in the second phase.
He added, the company will also invest in new hardware such as desktop computers and take over Zain’s existing hardware at depreciated value, depending on its condition.
Etisalat to borrow $12 billion for Zain (UAE)
If sources are to be believed, Emirates Telecommunications Corp. is planning to raise $12 billion of loans to fund its bid for a stake in Kuwait’s biggest phone operator.
According to sources, Etisalat is seeking $6 billion in a one-year loan that can be extended by six months. The debt will be refinanced with bond sales, following Etisalat’s formation of an issuance program in November for as much as $8 billion.
As per the previous statements by Etisalat, it offered about $12 billion for a 46% stake in Mobile Telecommunications Co., or Zain.
According to sources, the Abu Dhabi-based company is also planning to raise $3 billion in a three-year loan and another $3 billion for five years.
The deal would extend Etisalat’s reach in the Middle East, where Zain operates in countries from Kuwait and Iraq to Bahrain. Etisalat offers telecommunications in 18 countries in the Middle East, Africa and Asia, counting more than 100 million customers. The seven emirates of the U.A.E make up about 86% of Etisalat’s sales.
Kuwait’s commercial court set Dec. 15 as the date to consider a lawsuit to stop the due diligence process to sell the stake in Zain to Etisalat.
Zain selects UBS to sell Saudi unit
Kuwait’s Zain Group has appointed Switzerland-based financial service provider UBS to sell its Zain Saudi Arabia unit.
The Swiss company specializes in asset management and investment banking. The sale of the Saudi Arabian cellco, in which Zain holds a 25% stake, valued at US$756 million according to current prices, which has arisen following UAE-based Emirates Telecommunications Company’s (Etisalat’s) non-binding offer worth around US$12 billion for a 46% stake in Zain Group.
Etisalat already owns a controlling stake in Saudi’s second-placed mobile operator Mobily and its broadband unit Bayanat Al-Oula, so any transaction for Zain’s local assets would contravene local anti-monopoly regulations.
As per recent speculations, both Bahrain Telecommunications (Batelco) and South Africa’s MTN Group are in talks to buy the unit, although neither company has confirmed their involvement thus far.
Zain shareholder threatens to sue Zain Saudi buyers
A shareholder in Kuwait’s Zain has filed a court case to stop the due diligence in a planned sale of a controlling stake in the company to the UAE’s Etisalat for around US$12 billion.
According to Sheikh Khalifa Ali al-Khalifa al-Sabah, whose brother is heading Al Fawares Holding, the shareholder taking the legal action, he understood a court date had been set.
As per him, he thinks Dec. 8 has been set for hearing the urgent part of it, which is a request to halt the board members’ decision to open books to Etisalat.
According to previous statements by Kharafi Group, one of Zain’s major shareholders, it gathered enough approvals from shareholders to sell their combined stake to Etisalat. As some 10% of Zain shares are held as treasury stock, the 46% holding would give Etisalat effective control of the company.
According to Sheikh Khalifa, without an official offer, how can you open the books? Their aim is not to stop the deal, but is to stop opening the books. The agreement is not obligatory and based on that, books should not be opened.
France Telecom in talks to buy Korek Telecom stake
France Telecom is in discussion to acquire a minority stake in Iraq’s third-largest mobile phone operator, to expand in the Middle East.
According to sources, it was considering purchasing a stake in Korek Telecom, in a deal that give the Iraqi mobile operator an enterprise value of US$$1.5 billion. Although no deal has been finalized, France Telecom is interested in eventually securing a controlling stake in Korek.
The French telecoms group is looking for growth in emerging markets in Africa, the Middle East and Asia.
It is competing with two much larger groups: Zain, Iraq’s largest mobile operator, which has 11.8 million customers, and Asia Cell, the second largest, which has 7.9 million.
According to Stephane Richard, France Telecom’s Chief Executive has set a target of doubling the group’s revenue from Africa and the Middle East within five years.
Etisalat sorts out $12bn M&A debt
If sources are to be believed, United Arab Emirates’ biggest mobile-phone operator Emirates Telecommunications Corp., also known as Etisalat, is sorting out final details of up to $12 billion of financing to support its acquisition of a 51% stake of Kuwait’s Mobile Telecommunications Co., or Zain.
According to sources, the financing is being structured as a $6 billion bridge loan to bond issue with a one-year maturity and an option to extend for six months. The remaining $6 billion is evenly divided between a three-year loan and a five-year facility. The structure has all but been worked out. The company is just talking about the finer detail now.
Etisalat is still undertaking due diligence on Zain with the process being slowed down by local holidays.
Bharti consider Ericsson, Nokia Siemens & Huawei for African operation contracts
If reports are to be believed Bharti Airtel is set to award telecoms infrastructure contracts for its African operations to three network vendors—Ericsson, Nokia Siemens and China’s Huawei.
According to reports, the contracts, which are likely to be for five years, will be worth upwards of $3 billion.
According to sources, Bharti is slated to close the Africa deal closely, and had so far been unable to do so since China’s ZTE too had come up with a competitive offer. Ericsson, Nokia Siemens and Huawei have been associated in some form with Zain’s operations in Africa. It is ZTE, which is the new player in the fray.
This will be the third major outsourcing contract that Bharti will be awarding for its Africa operations, and will mark yet another significant step towards replicating its hugely successful outsourcing model in that continent.
Connectiva may ink software deal with Bharti
Connectiva Systems, which sells software solutions to help mobile phone companies plug revenue leakages and track customer preferences, has hinted that it will ink a multi-year revenue management software deal with Bharti Airtel for its African operations, spanning 16 countries.
If the deal goes through, Connectiva Systems will deliver a mix of fraud control, revenue assurance and customer experience management solutions to Bharti.
The company has in the past delivered telecom software solutions to Kuwait’s Zain. Zain’s African assets were acquired by Bharti Airtel earlier this year. The revenue management software vendor will also work closely with IBM, which recently inked a $1.5-billion outsourcing deal to manage Airtel’s IT requirements in Africa.
According to Connectiva Systems founder Avi Basu, Connectiva Systems is in advanced talks with Bharti Airtel. Since the company has an existing relationship with Zain, they have a broad understanding of their worldwide telecom networks. They are also looking forward to work closely with IBM, which is one of existing strategic partners.
Connectiva is owned by key US VCs like Ovation Capital, Carthage, Vinod Dham’s Indo-US Ventures and IFC-Washington.
The company’s objective would be to optimize the revenue management of Bharti’s African operations. They are also looking at customer experience management software modules that can help mobile phone companies track high-end customer’s VAS/data service preferences in a 3G scenario, he added
Zain Zambia plans to deploy 600 Base Stations
Zain Zambia has announced that it is planning to set up over 600 new base stations over the next two years in order to double its network capacity.
According to Commercial Director Mark Ocitti, the two-year investment projection would increase the capacity of the telecommunication company. Before the start of this programme, the company had 624 base stations across the country, and so far they have spent US$8 million to put up 32 sites in the past three months. Zain will be doubling current base station numbers within the next one and half years; that’s over a thousand base stations across the country.
Ocitti however noted that some parts of the country which had few people would forfeit some company investment capital.
