Etisalat inks Zain diligence deal

Major Zain shareholder Kharafi Group and etisalat signed an agreement on Wednesday to start the due diligence for a deal to sell 46 per cent of Zain to the UAE telcom operator.

"We were informed by our client that Al Khair National and Emirates Telecommunications Co have signed an agreement, and the due diligence will start," National Investments Co., a Kharafi Group unit, said in statement on the Kuwaiti bourse.

In September, etisalat, the Gulf's second-largest telecom operator by market value, bid 1.7 dinars ($6.06) a share for a 46 percent stake in Zain in a deal worth just under $12 billion.

The bid won the backing of major Zain shareholder Kharafi Group, which began gathering a consortium of shareholders to tender to the offer.

CNBC Arabia reported on its website that due diligence would continue for six weeks maximum.

During this period, etisalat has to offload its 25 per cent stake in Zain Saudi Arabia to a third party because regulations in Kingdom do not allow one telecom operator to own stake in more than one company.
CNBC said there are a number of parties interested in buying Zain Saudi stake.

Zain paid $ 6.1 billion in 2007 to purchase third mobile operator licence in the Kingdom.