x Abu Dhabi, UAEFriday 21 July 2017

Senior executives resign from Zain

Three executives at Zain Group step down.

Three senior executives from Zain Group have resigned, the Kuwaiti telecommunications operator says.

The news came yesterday as Etisalat bids to take control of the company in a US$12 billion (Dh44.07bn) deal that has yet to be closed.

The executives who stepped down were: Barrak al Sabeeh, the chief operating officer; Haitham al Khaled, the chief strategy and business development officer; and Salah al Fawzan, the adviser to the group's chief executive. A statement from Zain cited "personal commitments" as the reason for the resignations of all three.

The chief executive, Nabeel bin Salamah, said in a statement he had wanted the executives to remain with the company but they opted to leave.

Separately, Zain has rejected all three offers for its Saudi operations, Reuters reported yesterday.

The sale of the Zain Saudi Arabia assets, worth $750 million, is part of the proposed Etisalat buyout.

Zain Saudi has accumulated an estimated $3.9bn in debt since it launched in August 2008.

The conditions for the completion of the Etisalat deal include the sale of Zain Saudi Arabia.

Etisalat already operates in Saudi Arabia under the Mobily brand and acquiring the Zain unit would not be allowed by the country's telecoms regulators.

Kingdom Holding, Bahrain Telecommunications and a consortium led by Al Riyadh Group have made offers for the Saudi unit.

But Kingdom Holding yesterday said its offer had expired. The bid for a 25 per cent stake has been extended twice.

"The board of Zain Kuwait did not provide Kingdom Holding with an answer with regard to the presented offer, so the offer period expired without reaching any agreement," Kingdom Holding said in a statement on the Saudi bourse.

Jamal al Jarwan, the head of international investments for Etisalat, last week said Etisalat had a 50 per cent chance of closing the deal by the end of the month.

"I think that Etisalat-Zain possibility [is] 50-50 so far, and [while] I don't want to give any impressions, I think the market cannot stand a lot of competition, especially in telecoms," Mr al Jarwan said in a panel session at the Mobile World Congress in Barcelona.

The Zain deal has been plagued by delays including a drawn-out due diligence process by Etisalat, and two lawsuits filed by a Zain board member to try to prevent the acquisition.

Sheikh Khalifa Ali Al Sabah, a member of Zain's board of directors, has disputed the deal and has filed lawsuits in Kuwait to block the sale to Etisalat.