New Delhi: In a major cash bonanza for its shareholders to celebrate sale of its African assets, Kuwaiti telecom major Zain on Wednesday announced that it will distribute “a large proportion” of upfront payment from Bharti as dividend.
Zain on Wednesday announced signing definitive agreement for sale of 100% stake in its African business, excluding Morocco and Sudan, to Bharti Airtel for $10.7 billion.
After repayment of a $4 billion debt, Zain would distribute a majority of the upfront proceeds from the sale as dividend among its shareholders, the company said in a statement from Amsterdam.
The deal involves payment of $8.3 billion immediately upon closing of the deal and $700 million to be paid one year after closing. Besides, Bharti Airtel will assume $1.7 billion of consolidated debt obligations.
“Subject to shareholder approval, the size of available distributable reserves and the repayment of the $4 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, Mr Asaad Al Banwan, chairman, Zain Group, said: “This transaction crystallises the significant value we have created for our shareholders over the last 5 years.”
Zain Group CEO Nabeel Bin Salamah said: “The transaction allows Zain to focus on its highly cash generative operations in the Middle East and to substantially improve its balance sheet. We are excited about the growth prospects of the Middle East and we believe Zain is well positioned to capture this opportunity.”