Kingdom Holding to complete Zain Saudi due diligence by late September

13 September 2011

Consortium closing in on $950m bid for Saudi telecoms firm

Saudi Arabia’s Kingdom Holding says it expects to complete the due diligence of mobile operator Zain Saudi by the end of September.

In March 2011, Kuwait’s Zain accepted a joint bid from Kingdom Holding and Bahrain’s Batelco for its 25 per cent stake in its Saudi subsidiary. The bid is worth $950m and does not include undertakings of the unit’s $5.5bn debt, of which $2.6bn is an Islamic facility repayable in 2012.

The due diligence process was initially expected to be completed by the end of August, but Ramadan and Saudi Arabia’s two-week Eid al-Fitr break have delayed the process.

“The consortium intends to move to complete its proposed acquisition of Zain Saudi based on term sheets signed in April and July of 2011 with Zain Group and Zain Saudi Arabia respectively, as soon as all outstanding conditions are satisfactorily negotiated with all parties concerned,” says a statement published on the Tadawul on Saturday 10 September.

Details of how the deal will be financed are still vague. Batelco has a cash balance of $231m, but it is Kingdom Holding that is expected to raise the capital locally.

Kingdom Holding’s share price rose 0.7 per cent with the announcement to SR7.45 ($1.98).

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