Zain Africa shareholders to decide future

Kuwait-listed mobile telecommunications group, Zain, has broken the silence over the proposed sale of its Africa operations with two senior officials saying takeovers and mergers are natural in the sector.

Zain Africa chief executive officer Chris Gabriel, who was in Malawi told local media in Malawi on Wednesday August 19, 2009 that the sale of the Africa operations was a matter for the shareholders to decide.

But Gabriel said regardless of the sale of some stakes, Zain is fully committed to invest and continue to operate in Africa and grow its business in Malawi.

He said the company is getting on with the job and has not been sold.

He said Zain will continue to invest in Africa and build on a campaign to invest in schools as it has done in the past.

Zain has been instrumental in Africa by donating school material such as text books, helping thousands of children to get access to education.

"We are still focused to invest and continue to grow and provide quality telecommunication service to the people of Africa and create a wonderful world," he said.

Gabriel added that Zain will soon be applying to the Malawi Communications Regulatory Authority (Macra) to invest in 3G technology to improve the quality of service and internet connectivity.

Zain Malawi managing director Fayaz King said telecommunications business is dynamic and capital intensive hence changes are normal.

"Yes, some investors are interested to buy assets in Africa…and talks are always there," said King.

Currently, Zain Group is engaged in negotiations with three major telecoms operators including one from India, according to Zain Group CEO Saad al Barrak.

International media reports in June indicated that the Zain Group planned to sell 85 percent stakes in Zain Africa for $12 billion to a French media and telecom giant Vivendi which later pulled out of the deal.

This week sources said Zain Africa operations were valued at $10 billion.

Zain is in the midst of a strategic review and is being advised by investment bank UBS. The company will hold an extraordinary general meeting on August 31 where shareholders are expected to vote on amending its ownership restrictions. The move would pave the way for selling a large stake in the firm, according to Reuters News Agency.

Formerly Celtel, Zain was founded by a Sudanese national, Mo Ibrahim in 1998 and was sold to Kuwait’s MTC, currently Zain, for $3.4 billion.

With operations in the Middle East and Africa, Zain is the third largest mobile operator in the world with a commercial presence in 24 countries, 16 of them in Africa.