Zain to pay out big part of sale proceeds
Kuwait City, May 27, 2010
Kuwaiti mobile operator Zain will distribute a large part of its returns from a $9 billion sale of assets to India's Bharti Airtel to its shareholders, Zain chairman Assad Al-Banwan said on Thursday.
In March, Zain struck a deal selling its operations in 15 African countries to Bharti for $9 billion. Questions about what the Kuwaiti firm would do with the windfall proceeds -- either invest them or pay them out to shareholders -- have persisted ever since.
"Regarding the surplus (returns from the sale) a big portion of it will be distributed to shareholders, in addition to our future investment operations," Al-Banwan told shareholders at an annual general meeting.
"If there are any investments in the near future in the Middle East...we will announce them at the time."
Zain's shares gained 3.1 percent, bolstered in addition by Bharti's comments that its $9 billion purchase of the Kuwait operator's African assets would be completed soon.
Zain said in February that it will concentrate on the Gulf and Middle East region and is open to new investments. Some analysts say Zain would benefit from investing more in its existing operations, rather than seeking again to grow abroad.
On February 16, Zain said it would pocket up to $5 billion from the planned sale of its African assets, excluding Sudan and Morocco, in a $9 billion deal.
Separately, shareholders approved the board's recommendation to distribute a cash dividend for 2009 of 170 fils per share, which excludes distribution from the sale of some of Zain's African units to Bharti. There are 1,000 fils to the dinar.
Al-Banwan said Zain's Saudi unit may reach the breakeven point this year and that the group was working on rescheduling the unit's debt.
The Zain group swung to fourth quarter loss of 0.7 million dinars ($2.42 million) in the fourth quarter of 2009, according to Reuters calculations.
Earlier this month, the firm posted a 31 percent rise in its first quarter net profit to $179 million. - Reuters