The sale of a controlling stake in the Kuwaiti telecommunications company Zain to a consortium of Indian and Malaysian firms is taking longer than expected, the largest private shareholder in the operator said yesterday. National Investment, a unit of Kuwait's Kharafi Group, issued a statement to the Kuwaiti bourse that the sale of 46 per cent stake in Zain for 2 Kuwaiti dinars (Dh25.5) per share, or about US$13.69 billion (Dh50.28bn), will take more time to wrap up.
"Due to the developments that occurred over the last period in the region's economic and financial circumstances, the procedures to finalise the sale process could take more time than previously set, but the deal still stands," the statement said. A consortium led by the Vavasi Group from India and also consisting of Bharat Sanchar Nigam (BSNL), Mahanagar Telephone Nigam (MTNL) and Malaysia's Al Bukhari Group is said to be part of the deal to buy Zain.
Badr al Kharafi, the vice-chairman of Kharafi Group, said in September the deal would take about four months to close. Yesterday's announcement was not expected to have any material impact on the minority shareholders, said Kunal Bajaj, a telecoms analyst with HSBC in Dubai. "This news is immaterial because this is just a transfer of ownership from one consortium to another consortium," Mr Bajaj said. Shares in Zain remained flat at 990 fils on the Kuwait Stock Exchange yesterday. Both state-owned operators BSNL and MTNL recently said that their involvement in the Zain purchase was on hold, citing the need for more due diligence with the Vavasi Group.
The Indian telecoms minister Gurudas Kamat said in November that the two companies had not formed any consortium agreement to purchase Zain. Last month, Farid Arifuddin, the managing director of the Vavasi Group, said the deal would happen. "We are going ahead with the transaction but I do not wish to disclose the details just yet," he said. "People are entitled to their opinion and as far as we're concerned, the deal will go on."
Mr Arifuddin declined to comment when asked if BSNL or MTNL remained involved in discussions to purchase Zain or whether there were other foreign operators looking to enter the consortium. Mr Bajaj said the lack of clarity behind the intentions of the consortium and the Kharafi Group had been confusing investors ever since the deal was announced in September last year. "There was never a crystal-clear answer whether they are selling something and, if they are, at what price, to whom, when the deal will close and how it will impact the minority shareholders," Mr Bajaj said.