Zain sells Saudi Arabia towers to IHS Holding for $648m
29 November 2018 | Alan Burkitt-Gray
Zain has sold 8,100 mobile towers in Saudi Arabia to IHS Holding for $80,000 each to reduce debt.
IHS will lease back the passive physical infrastructure to Zain Saudi Arabia, which is 37% owned by the Zain group of Kuwait.
Group CEO Bader Al Kharafi (pictured), who is also vice-chairman of the group, said: “The sale of Zain KSA’s impressive tower network is a highly positive move, as it creates shareholder value by helping the company reduce its debt position.”
The deal comes 13 months after Zain sold its 1,600 towers in Kuwait for $165 million. But the group got a better price for the Kuwait deal – $103,000 per tower there, compared with only $80,000 a tower in Saudi Arabia.
IHS is the largest independent tower operator in Europe, Middle East and Africa by tower count and the third largest independent multinational tower company globally. Most of its towers are in Africa – where it has nearly 23,000 towers, according to its website, of which more than two thirds are in Nigeria.
Zain said it is selling only its passive, physical infrastructure to IHS and will retain its intelligent software, technology and intellectual property with respect to managing its network. The agreement also involves a leaseback period of 15 years, with a five-year renewal option and building of an additional 1,500 towers over next six years.
With last year’s Zain Kuwait deal, IHS will own 9,700 towers in the two adjoining countries, making it what Zain calls “the first independent tower operator of scale in the region”.
The Saudi Arabia deal is subject to approval from the country’s Communications and Information Technology Commission (CITC), as well as approval from the lenders.
The board of Zain Saudi Arabia and the group management said they were “confident” that they had “chosen the right partners in IHS, a company that possesses high calibre expertise with sound operational experience in diverse markets”.
Al Kharafi said: “We recognise and appreciate the efforts made by the kingdom’s CITC in keeping abreast with global trends in the telecommunications sector by offering licences to provide wholesale services for tower infrastructure, thereby reducing capital expenditure challenges on telecom operators and raising the efficiency of mobile networks.”
He explained: “The deal unlocks capital and resources, allowing the operator to focus on its core operations and further invest in and deliver the latest ICT technologies to meet the ever-increasing demand for reliable broadband access and data consumption.”
Zain has 47.8 million active customers in Kuwait, Bahrain, Iraq, Jordan, Saudi Arabia, Sudan and South Sudan.
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