Etisalat, Zain talks progress well, close seen soon

Negotiations by UAE telco etisalat to buy a 46 per cent stake in Kuwait's Zain are progressing well and are expected to close very soon, a source familiar with the deal said on Wednesday.

Etisalat has bid 1.7 dinars for a stake in the Gulf's third-largest telecoms firm, in a deal worth nearly $12 billion.

The source, speaking on condition of anonymity, also said several operators had expressed interest in buying a stake in Zain Saudi once a deal is completed.

"The progress of the talks is going smoothly and (the deal) is expected to be finalized very soon," said the source.

If the deal closes, Etisalat is expected to shed Zain's stake in Zain Saudi to avoid contravening Saudi rules as it already owns a position in another Saudi telecom firm.

The UAE firm has received interest from various operators for the stake, the source said.

Etisalat officials could not immediately be reached for comment.

Earlier on Wednesday, etisalat's chief financial officer said the firm was studying how to finance a deal.

"If we do a deal, we want to know what is available, and we are looking at all options: loans, sukuk, bonds," said Salem Ali Al Sharhan.

Etisalat is being advised by Morgan Stanley and National Bank of Kuwait, while BNP Paribas is advising the Kharafi Group, a significant shareholder in Zain.

Kharafi has said it received the backing of enough Zain shareholders to sell 46 percent of the telecommunications group to etisalat.

Etisalat, which is 60 per cent state-owned, will not receive financing from the Abu Dhabi government, CFO Sharhan was quoted as saying in Al Bayan newspaper on Wednesday.

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