Etisalat to Raise U.S.$12 Billion for Zain

Mergers, Acquisitions and Financial Results

Etisalat has indicated its intention to raise $12 billion of loans to fund its bid for a stake in Zain. The United Arab Emirates largest telecommunication company in an agency release yesterday, said it is also seeking $6 billion in a one-year loan that can be extended by six months, although the terms have been identified as private.

The agency also disclosed that the debt will be refinanced with bond sales, following Etisalat's creation of an issuance program in November for as much as $8 billion.

Earlier, Etisalat on 30th of September said it had offered about $12 billion for a 46 percent stake in Mobile Telecommunications Company, Zain. The Abu Dhabi-based company also disclosed plans to raise $3 billion in a three-year loan, and another $3 billion for five years.

The deal would be the largest acquisition financing by a company in the Middle East and Africa since 1999. The Arab company said it would extend Etisalat's reach in the Middle East, where Zain operates in countries from Kuwait and Iraq to Bahrain. Etisalat offers telecommunications in 18 countries in the Middle East, Africa and Asia, counting more than 100 million customers, according to its website. The seven emirates of the U.A.E make up about 86 percent of Etisalat's sales.

Kuwait's commercial court has set December 15 as the date to consider a lawsuit to stop the due diligence process to sell the stake in Zain to Etisalat. Al-Fawares Holding Co., a shareholder in Zain, filed the complaint against Al-Khair National for Stocks & Real Estate Company, National Investments Co. and Zain, according to the court last week.

Standard & Poor's rates Etisalat's debt AA-. Moody's Investors Service grades it Aa3. Fitch ratings ranks it A+.

Meanwhile, Bharti Airtel's Nigerian unit has slashed its mobile phone tariffs to 12 naira ($0.08) per minute and the reduction is said to be in line with the Company's policy to reduce costs for customers.