KUWAIT CITY — Kuwait's Zain telecom said yesterday it will post a net profit of $3.3 billion from the sale of its African operations to India's Bharti Airtel for $10.7 billion.
Zain in a statement posted on the Kuwait Stock Exchange website said it expects to add the profit to its results in the second quarter of the year.
The company last month had expected to post returns of "up to $5 billion," from selling operations in 15 African nations. Zain units in Sudan and Morocco are excluded.
Zain and Bharti Airtel on Tuesday signed definitive agreements for the sale of the African operations and are expected to close the deal shortly after completing necessary regulatory approvals.
Zain said the transaction stipulates that Bharti pay $9 billion, of which $8.3 billion will be handed over on closing of the deal while $700 million will be paid one year from closing.
Bharti Airtel will also assume $1.7 billion of consolidated debt obligations, Zain said in the bourse statement.
Zain will pay around $4.2 billion of revolving credit facility and provisions, the statement said.
In statements following the signing of the agreement, CEO Nabeel bin Salamah said the deal allows Zain to focus on its highly cash generative operations in the Middle East and to substantially improve its balance sheet.
"We are excited about the growth prospects of the Middle East and we believe Zain is well positioned to capture this opportunity," Salamah said.
UBS Investment Bank acted as lead financial adviser and BNP Paribas acted as co-adviser to Zain in relation to the transaction. — AFP