Zain sued over Iraqi telco acquisition
Kuwaiti operator Zain has reportedly been sued for $4.5 billion by an undisclosed company over its purchase of Iraqi operator Iraqna in 2007.
Zain acquired Iraqna from Orascom Telecom for $1.2 billion in December 2007 and merged it with its own Iraqi unit, Atheer, creating a joint – entity and Iraq’s biggest operator by subscribers – Zain Iraq.
In a statement on Sunday, Zain said that an undisclosed firm filed a lawsuit against Zain in August last year, claiming that Zain’s acquisition had prevented its own purchase of Iraqna, causing the company losses of $4.5 billion.
“Zain Iraq believes its position in the case is strong, as the claimant company has failed, until now, to produce any evidence to back its claim,” the statement from Zain read.
The anonymous company is also jointly suing Zain and the Iraqi telecoms regulator, the Communications and Media Commission (CMC), for a further $1 billion.
According to Reuters, an Iraqi court stated in January that all Zain Iraq’s revenue from its subscriber base – transferred to Zain as a result of its Iraqna purchase – should be placed under legal guardianship in an Iraqi bank until the case is resolved.
Last month, Zain finalised an $800 million, five-year loan facility from 11 banks.