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Zain fuels African sale rumours

Zain fuels African sale rumours

Speculation that aspiring global carrier Zain is looking to sell off its African portfolio was fueled further this week, after it emerged that Swiss bank UBS has been appointed to help the firm assess its operations.

Rumours have been circulating over the past couple of weeks that the budding heavyweight is looking to dispose of its recently acquired African operations.

Zain acquired African player Celtel in 2005 for $3.36bn, and has continued to invest and acquire in the region ever since – most recently exploring opportunities in Morocco in March 2009. It has also broken ground internationally by establishing a pan-regional network, the use of which incurs no roaming charges for end users. The African portfolio was central to that strategy.

Moreover, the firm paid out for a major rebrand last summer, that saw all of its African properties rebadged with the Zain colours, and it has always pitched its MEA empire building as the second step in a process that will ultimately see it expand across the globe.

But while the carrier has never had any trouble raising money in the past, even the wealth of the Middle East is not immune to a global financial crisis and, more recently, the firm has been laying off staff, hatching outsourcing plans with kit vendors and launching various cost management initiatives. The figure being touted for the firm’s African portfolio is $12bn, and the buyer, according to reports, is an unnamed French player – which some industry commentators have identified as Vivendi.

A Zain spokesman told telecoms.com that the company is “running a strategic review to enhance shareholder value,” and has an ongoing relationship with UBS.

The spokesman also said that the firm: “Is continuously assessing the telecommunications landscape in the Middle East, Africa and Asia for value accretive acquisition opportunities. Zain will continue its evaluation of opportunities in this regard and, at this stage, is not in a position to articulate its strategies, direction, targets or plans for the market.”

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