Indian firm in mega deal to buy Kuwait-based telecom company | india | Hindustan Times
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Indian firm in mega deal to buy Kuwait-based telecom company

To strike the second biggest deal ever struck by an Indian firm, telecommunication technology outfit Vavasi and Malaysia-based Al Bukhary has formed a consortium to take over the $7.5-billion (Rs 36,000 crore) Kuwait-based telecom service provider, Zain. Manoj Gairola reports. Who they are

india Updated: Sep 09, 2009 09:46 IST
Manoj Gairola

To strike the second biggest deal ever struck by an Indian firm, telecommunication technology outfit Vavasi and Malaysia-based Al Bukhary has formed a consortium to take over the $7.5-billion (Rs 36,000 crore) Kuwait-based telecom service provider, Zain.

The consortium is signing a deal with the Kharafi family of Kuwait for acquiring a 46 per cent stake in Zain.

If one goes by market capitalisation — the total value of the shares of a company — a 46 per cent stake in Zain would come to about $9.66 billion (Rs 64,368 crore).

The Rs 36,900-crore ($7.80 billion) Bharti Telecom is currently in a $23-billion (Rs 110,400 crore) two-way merger and acquisition negotiation with the $12.3-billion (Rs 55,000 crore) MTN of South Africa.

The Kharafi family, according to a deal that will be signed on Tuesday night, will sell off its entire 32 per cent holding in Zain to the consortium and mop up 14 per cent more from the market.

An industry source, who refused to be identified, said the Rs 34,000-crore (Rs 340 billion) Bharat Sanchar Nigam Ltd and Rs 5,300-crore (Rs 530 billion) Mahanagar Telephone Nigam Ltd, both public sector telecom undertakings, were exploring the possibility of joining the consortium.

Although the chiefs of both the PSUs were not available for comments, B.K. Syngal, former chief of Videsh Sanchar Nigam Ltd, a PSU that has become part of the Tata group, said, "Acquisition of Zain would give tremendous advantage to both BSNL and MTNL. But they will have to improve their processes to meet requirements of merger and acquisition."