Copying and distributing are prohibited without permission of the publisher
Zain to pay Bharti Airtel $129m to settle African sale
04 November 2016
Zain Telecom has agreed to pay Bharti Airtel $129m over a settlement related to the $10.7bn sale of its assets in 17 African countries in 2010
“Bharti Airtel (Netherlands) BV, and Zain Telecom, have reached an agreement, pursuant to which Zain is to pay to Airtel approximately $129 million for the settlement of all of Airtel’s claims on account of the Nigeria Litigation, certain tax matters and associated legal costs,” said an Airtel statement to the National Stock Exchange of India.
Under the terms of the 2010 share sale/purchase agreement, Zain had provided Airtel certain indemnities covering the Nigeria litigation and certain tax claims, it added.
Kuwaiti telecoms company Zain confirmed it was to sell all its African operations, excluding Sudan and Morocco, to India’s Bharti Airtel in March 2010. The combined entity entailed 165 million subscribers in Africa and South Asia. Zain had faced opposition from South Africa’s Econet Wireless, a minority shareholder in Zain, to sell its Nigerian operations to Bharti at the time. After the acquisition, Econet continued to contest and Airtel ended up losing a litigation case in the country and faced $3 billion in payouts.
But a separate settlement has also been reached with Econet, added Airtel: “Settling all claims, disputes whatsoever, between the two including in Nigeria and Netherlands.
“With these settlements, Airtel has closed several ongoing major litigations in Nigeria, UK and Netherlands.”
Since the sale, Zain has focused on growing and expanding its business in the Middle East; Bharti rebranded its business and new businesses under a single Airtel brand, which today has operations in 14 African countries.
Zain initially bought Celtel’s African operations in 2005 for around $3 billion and has reiterated that the figure won’t have any financial impact on the company as it has set aside provisions to cover the potential payments. GTB