Wednesday, February 24, 2010

Nigeria Dispute Could Curtail Bharti Zain Deal

Minority shareholder Broad Communications Ltd, which owns 14% share in Zain Nigeria, will seek to enforce its rights in any potential transfer of ownership in the company. The announcement came after Bharti Airtel entered into exclusive talks with Zain until March 25 to buy most of Kuwait-based Mobile Telecommunications Co. or Zain’s assets in Africa in a deal that could be worth up to $10.7 billion.

According to the largest minority shareholder in Zain Nigeria, Broad, the company has not been formally informed by the Zain Group of its intention to sell its 65% shareholding in the Nigerian entity and the company intend to fully exercise its pre-emption rights as directed by the courts and as guided by the company’s shareholders’ agreements entered into between the company’s shareholders.

The dispute over ownership of the largest unit in Nigeria might disrupt Bharti’s third attempt to enter the African market. Econent Wireless Holdings Ltd., a South African telecommunications company is attempting to overturn a 2006 deal in which Celtel, now known as Zain, bought a controlling 65% of the business that had been founded at the beginning of that decade by a group of government, institutional and private investors.

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