Zain sells Saudi towers to IHS - Mobile World Live

Zain sells Saudi towers to IHS

29 NOV 2018

Zain Group’s Saudi Arabia unit agreed to sell and then lease back its 8,100 mobile towers to investment company IHS Holding in a deal worth SAR2.43 billion ($648 million); funds it plans to use to cut debt.

In a statement, the company said Zain KSA is “selling only its passive, physical infrastructure to IHS and will retain its intelligent software, technology and intellectual property with respect to managing its network”.

Bader Al Kharafi, Zain Group CEO and vice chairman of Zain KSA (pictured), added the deal “creates shareholder value by helping the company reduce its debt position, as the proceeds will be used to reduce the company’s Murabaha facility”, a financing agreement worth SAR5.9 billion.

The operator said the deal also unlocks capital and resources, allowing it to focus on core operations and invest in new technologies to meet increasing demand for reliable broadband access and data consumption.

Zain KSA’s agreement involves a lease period of 15 years, with a five-year renewal option and the building of an additional 1,500 towers over the next six years.

The company, 37 percent-owned by Kuwait-based Zain Group, has been exploring the sale of its towers since January 2015, Reuters reported.

In 2017, Zain KSA was reportedly close to reaching an agreement to sell around 7,500  towers to Lebanon-based TASC Towers for $500 million, but the deal never materialised.

However, a deal to sell its towers in Kuwait to IHS Holdings for $165 million was reached during Q3 2017, a move designed to release capital to pursue new business areas.

At the time, Al-Kharafi said the deal was the “beginning of a strategy to unlock value from our fixed infrastructure, which can be more efficiently deployed in new technologies and higher yielding investments.”

The Saudi Arabian deal is subject to approval from the Kingdom’s Communications and Information Technology Commission and lenders.

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Saleha Riaz

Saleha joined Mobile World Live in October 2014 as a reporter and works across all e-newsletters - creating content, writing blogs and reports as well as conducting feature interviews...More

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