Wednesday, July 21, 2010

Zambia - Airtel to acquire the 22% Zain Group stake in Zain Zambia

[zambia post] ZAIN Zambia Plc, trading as Celtel Zambia, is tomorrow set to suspend transactions on Lusaka Stcok Exchange (LuSE) as Bharti Airtel prepares to buy the 22 per cent of the publicly-listed stake in the company.

According to a note sent to investors and the public, Pangaea Renaissance Securities Limited, the sponsoring broker for Zain Zambia Plc, stated that Bharti Airtel is expected to proceed to implement a mandatory offer to the minority shareholders of Zain Zambia in accordance with clause 56 (a) of the Securities – Takeovers and Mergers - rules.

A mandatory offer to the minority shareholders might result in Bharti Airtel mopping the 22 per cent stake in Zain Zambia Plc that is publicly traded, a move that would automatically lead to the country’s biggest mobile phone company de-listing from the local bourse.

According to market analysts, the continued existence of Zain Zambia Plc on LuSE was dependent on the response minority shareholders would make to the mandatory offer.

In accordance with clause 56 (a) of the Securities Takeover and Mergers rules, Bharti Airtel would be given authority of the possibility of offering to buy from the Zambian minority shareholders, up to 22 per cent Celtel Zambia Plc shares currently trading on the LuSE.

“Zain Zambia shareholders and public are hereby advised that trading in Zain Zambia shares shall be suspended effective 22 July 2010 to facilitate an orderly process for establishing a record date of July 27 of the shareholders register for the purpose of the mandatory offer,” the note read in part.

“Subject to the terms and conditions of the Lusaka Stock Exchange Listing rules and Companies Act, Chapter 388 of the Laws of Zambia, trading shall resume upon completion of the mandatory offer.”

The Zambia Competition Commission (ZCC) last May endorsed final conditional authorisation for Bharti Airtel to take over 78 per cent shares in Celtel Zambia Plc despite “concerns over interconnection rates and non or full disclosure of Internet roaming rates to Zain customers”.

The takeover of Zain Zambia Plc follows Bharti Airtel's acquisition of Zain's African mobile services subsidiaries in Burkina Faso, Chad, Gabon, Cameroon, Congo Brazzaville, Congo DR, Kenya, Malawi, Niger, Sierra Leone, Uganda, Madagascar, Nigeria, Ghana and Zambia.

The Kuwait-based mobile phone is selling all its franchises in Africa except its operations in Sudan and its investments in Morocco, both of which are Arabic countries.

Of all the Zain operations in Africa, Zain Zambia Plc was the only publicly listed entity.

Bharti Airtel set to acquire 22% of Zain Zambia public listed stake

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