Ratio Magazine :: The Inside Track to East Africa’s Economies - Africa Agenda: Press Release: Zain Group Raises USD4.49bn to Fund Further Expansion

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Africa Agenda: Press Release: Zain Group Raises USD4.49bn to Fund Further Expansion

Friday, 26 September 2008

99% of shareholders subscribe in largest ever capital raising in Kuwait’s history

Kuwait, September 20, 2008 --- Zain Group, the leading mobile telecom operator in the Middle East and Africa, announces that it has raised USD4.49bn (KWD1.2bn) through a capital increase with 99% of all shareholders subscribing. The funds raised will be used to fund further acquisitions.

The amount raised is unprecedented in Kuwaiti’s history exceeding all expectations, given the gloomy trends that have recently dominated local and international markets and resulted in sharp declines in the prices of oil as well as significant collapses in the financial markets worldwide.

"The successful completion of the largest capital increase in the history of Kuwait is an unanimous vote of confidence by our shareholders in Zain's management team, the performance to date and in our profitable expansion strategy aiming to be a top-ten global mobile operator by 2011," said Zain’s Chief Executive Officer Dr Saad Al Barrak, adding that “the proceeds of this capital increase will be used to finance future strategic expansion plans and meet financial commitments.”

Zain has managed to achieve unprecedented leaps in the global mobile telecommunications sector over the past five years to be now present in 22 countries on two continents serving over 50 million active customers.

Every Zain shareholder of record on 10 March 2008, the date the company held its ordinary and extraordinary General Assembly Meeting was eligible to subscribe to a number of capital increase shares equal to 75% of the total number of shares they held on this date. The capital increase subscription price was 850 fils (approximately USD3.20) per share i.e. a par value of 100 fils per share plus a premium of 750 fils. The subscription period commenced 17 August 2008 and closed on 18 September 2008.

“All the group's financial indicators are now geared up to witness exponential growth on the back of Zain's huge investments in expansion projects in many of the Middle East and African markets in which we operate. We expect these investments to bring about substantial increases in the group's future revenues and net profits” commented Dr Al Barrak.

The National Bank of Kuwait (NBK) through its local and international branches acted as the receiving bank for the capital increase. Commending the role the bank played in this successful capital raising, Dr Al Barrak said "NBK has always been our partner ever since we took our first expansionary step in Jordan way back in 2003. It has successfully managed several of Zain's acquisition transactions to date and exceptionally managed this and Zain’s previous capital increase back in November 2005."

Background

Zain is a leading emerging markets player in the field of telecommunications aiming to become one of the top ten mobile operators in the world by 2011. Zain was established in 1983 in Kuwait as the region’s first mobile operator. Since 2003, it has grown significantly becoming the fourth largest mobile network in the world in terms of geographic presence with a footprint in 22 countries spread across the Middle East and Africa providing mobile voice and data services to over 50.74 million active customers (as at 30 June 2008).

Zain operates in the following countries: Bahrain, Burkina Faso, Chad, Republic of Congo, the Democratic Republic of the Congo, Gabon, Iraq, Jordan, Kenya, Kuwait, Malawi, Madagascar, Niger, Nigeria, Saudi Arabia, Sierra Leone, Sudan, Tanzania, Uganda and Zambia. In Lebanon, the company manages the network on behalf of the government operating as mtc-touch. The company’s mobile operations in Ghana will begin by the end of 2008.

The Zain brand is wholly owned by Mobile Telecommunications Company KSC, which is listed on the Kuwait Stock Exchange (Stock ticker: ZAIN). The company had a market capitalisation of over USD27.5bn on 18 September 2008.

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