10 October 2017
| Natalie Bannerman
Zain has agreed to sell and leaseback the passive physical infrastructure of its mobile tower portfolio in Kuwait for $165 million to IHS Holding.
The deal is said to result in a newly formed entity that
will acquire and manage Zain’s tower assets in
Kuwait, with Zain holding a minority share in the new
Speaking on the deal between Zain and IHS, Bader Al-Kharafi,
vice-chairman and group CEO of Zain, said: "This transaction is
set to support Zain’s transformational strategy in
becoming a digital lifestyle provider as it will optimize
operational efficiencies, enhance customer experience, and
deliver greater value for its shareholders. This deal will
unlock value that can be more efficiently deployed in new
technologies and higher yielding investments for Zain, and at
the same time pave the way for further network expansion and
tower infrastructure sharing in Kuwait."
Under the scope of the agreement, Zain will only sell its
passive, physical infrastructure to the new company but will
retain its intelligent software, technology and intellectual
The deal has been approved by Kuwait’s
Communication and Information Technology Regulatory Authority
(CITRA) but is still subject to other regulatory and statutory
approvals. The transaction is expected to close in the first
quarter of 2018.
Issam Darwish, executive vice chairman and CEO of IHS,
added: "We are delighted to partner with Zain on this agreement
which will expand our operating footprint into the Middle East.
We look forward to a long-term partnership with Zain, where we
can demonstrate our strong operating capabilities and service
offering in support of their customers. We expect significant
growth in wireless phone and data usage in a number of emerging
markets over the next few years and we believe, given the
significant experience we have gained in our African
operations, we are well positioned to meet the growing needs of
wireless network operators in these countries."
In related news, Omantel has
offered to buy a 12% stake in Zain. The deal which is said to
be worth $960 million, will more than double Omantel's share of
the company months after spending $846 million for a 9.8%
stake back in August.
Omantel said that it had signed a non-binding letter of
intent with Kuwait-based Al Khair, the investment firm of
Kuwait’s Al Kharafi merchant family and owners of
Mobile Telecommunications Co, Zain’s trading
parent company, is said to be studying the offer made by
Omantel, which could grant the company management control,
though no financial details have been given.