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Optimistic Batelco says Kuwaiti court ruling will not affect Zain Saudi deal

28 Sep 2011

According to Reuters, Bahrain Telecommunications (Batelco) CEO Peter Kaliaropoulos is confident that Sunday’s court ruling against Kuwait-based telecoms giant Zain Group will not derail his company’s proposed USD950 million joint deal to acquire a 25% stake in Zain Saudi Arabia. As previously reported by TeleGeography’s CommsUpdate, on 14 March Zain accepted a joint offer for its 25% stake in Zain Saudi Arabia from Batelco and Saudi billionaire Prince Alwaleed bin Talal’s investment vehicle, Kingdom Holdings Company (KHC).

Sunday’s legal intervention saw a Kuwaiti lower court rule that Zain’s annual shareholder meeting – which was held in April 2011 – was invalid, upholding a case brought by former board member Sheikh Khalifa Ali Al-Sabah, who opposes the deal. The court annulled all decisions taken by the Zain board, which it found guilty of a number of violations, including: failing to record shareholders’ objections to the Zain Saudi Arabia deal, and even ‘stopping some shareholders from entering, locking the doors’.

Despite the setback – the latest in a long line of obstacles thrown in the way of the long-running deal – Kaliaropoulos told Reuters that he is awaiting official clarification from Zain regarding the full implications of the court ruling. He commented: ‘The court case was in Kuwait, not Saudi Arabia. If it was detrimental, we would have heard straight away. I can only judge that because we have not heard at this point in time, it is not [of] material impact’. Kaliaropoulos reiterated that he expects due diligence on the deal to be completed by the end of September.

Kuwait, Saudi Arabia, Bahrain Telecommunications Company (Batelco), Zain Group, Zain Saudi Arabia

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