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UPDATE 1-Zain says African assets sale talk halted

Published 10/05/2009, 04:40 PM
Updated 10/05/2009, 04:42 PM
VIV
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* Potential Zain stake buyers asked for Africa halt - CEO

* CEO still expects 30 pct EBITDA growth in 2009 (Adds details, background)

By Rania El Gamal and Eman Goma

KUWAIT, Oct 5 (Reuters) - Kuwait's Zain , the Gulf's third-largest telecoms firm by market value, halted talks to sell its African assets to appease potential buyers of a stake in Zain Group, the firm's chief executive said.

Last month, Kuwaiti conglomerate Kharafi Group said it had agreed to sell 46 percent of Zain to a consortium led by India's Vavasi Group and including telecoms firms Bharat Sanchar Nigam [BSNL.UL] and Mahanagar Telephone Nigam , and Malaysian billionaire Syed Mokhtar al-Bukhary. [ID:nN08292119]

"Zain's Africa talks are halted for this reason," Saad al-Barrak told reporters on Monday night when asked if talks had been frozen at the request of the potential consortium to buy the 46 percent stake in the whole company.

On Sept. 8, the managing director of Vavasi Group said the consortium will not sell Zain's African assets. [ID:nL8534327]

Zain, which operates in 24 countries, had said it was in talks to sell its African assets -- excluding Morocco and Sudan -- after French media and telecoms conglomerate Vivendi broke off talks on buying the operations.

India's Reliance Communications , the country's No. 2 mobile operator, was said to be in talks for the assets.

Earlier on Monday, Kuwait's sovereign wealth fund said it might consider selling shares in Zain, in which it holds a 24.6 percent stake, though the fund is not party to talks between stockholders of the telecom firm and potential buyers. [ID:nL5211472]

Despite the sale talk, Barrak reiterated on Monday that he expects earnings before interest, taxes, depreciation and amortization, or EBITDA, to rise by 30 percent in 2009.

"Our (EBITDA) growth in the first eight months is 33 percent," he said. He declined to give a forecast of net profit in 2009.

"This year we do not have losses, we have profits, rewarding profits," he said.

Zain posted a 5.5 percent rise in second-quarter net profit to 78.8 million dinars ($274.8 million) on a higher number of customers. [ID:nLL601576] (Writing by Christopher Kaufman and Rania El Gamal, editing by Gerald E. McCormick and Tim Dobbyn) (New York Equities Desk, +1 646 223 6011)) ($1=.2868 Kuwaiti Dinar)

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