Zain investors eye hefty dividend

Written by Agencies | New Delhi | Updated: Mar 31 2010, 23:36pm hrs
Kuwaiti telecom major Zain will distribute "a large proportion" of upfront payment it receives from Bharti as dividend to shareholders.

Zain, which is selling its operations in 15 African countries to Bharti, yesterday signed the deal for an enterprise value of USD 10.7 billion.

Bharti would make an upfront payment of USD 8.3 billion and another USD 700 million after a year.

After repayment of a USD four billion debt, Zain would distribute a majority of the upfront proceeds from the sale as dividend among its shareholders, the company had said in a statement from Amsterdam.

Besides, Bharti Airtel will assume USD 1.7 billion of consolidated debt obligations.

"Subject to shareholder approval, the size of available distributable reserves and the repayment of the US four billion Revolving Credit Facility, Zain intends to distribute a large proportion of the upfront net proceeds to shareholders in the form of dividends," Zain said.

"The transaction is expected to close as soon as reasonably practicable subject to the satisfaction of certain approvals," it added.

Commenting on the transaction, Asaad Al Banwan, Chairman, Zain Group, said: "This transaction crystallises the significant value we have created for our shareholders over the last 5 years."