Following the announcement earlier this week that Zain had received an offer to buy its African assets, the company has announced that it will enter into exclusive talks with India's Bharti Airtel for the sale. The exclusivity period lasts until 25th March and covers Zain's assets in Africa, excluding Sudan and Morocco.
Bharti's proposal implies an enterprise value of approximately US$ 10.7 billion with US$ 10 billion to be paid upon closing whereas the remaining US$ 700 million will be paid one year after the conclusion of the deal. There is a break up fee of US$ 150 million applicable to both parties. Upon successful conclusion, this transaction would reflect an equity value of approximately US$9.0 billion for Zain Africa.
After the repayment of certain liabilities, Zain expects net proceeds of up to US$ 5 billion taking into consideration that Zain Group anticipates the expected proceeds when realized to be reflected on the company's profit and loss during the second quarter of this year. Any decisions to distribute dividends or not reverts to the recommendation of the Board of Directors and the ratification of the General Assembly.
Bharti's proposal is currently subject to due diligence, customary regulatory approvals and signing of final transaction documentation. There can be no assurance that a transaction will be consummated. Further announcements will be made in due course.
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