Omantel nominates four new board members to Zain Group
Omantel on Monday announced the nomination of four new members to the board of directors at Mobile Telecommunications Co (Zain Group).
Including the appointment of Talal al Mamari, CEO of Omantel, as a non-executive director on September 19, Omantel will have a majority on Zain’s board with five of the eight seats.
Addressing a press conference at the Muscat Securities Market on Monday, Mamari said, “We welcome the nomination of the four new members to Zain’s board of directors. We look forward to working closely with the management teams and our fellow board members with the aim of bringing our two complementary businesses together and creating a new digital telecom powerhouse in the region.”
He said the new group has a balanced and diversified portfolio of growth and cash generative assets across nine markets. “Bringing these assets together will generate synergies across wholesale, procurement and knowledge sharing along with increased collective exposure to high growth potential markets.”
Omantel on Sunday won the bid to acquire additional 12.1 per cent of the issued share capital in Zain, making Omantel the second largest shareholder in Zain with a 21.9 per cent stake. Total equity value is US$2.19bn and includes the previously announced acquisition on August 24 of 9.84 per cent of the total fully paid and issued share capital.
Omantel hosted a conference call on Monday to discuss the transaction with the financial community.
The new group will be the third largest telecom group in the Middle East and North Africa (MENA), with over 52mn customers.
This transformational transaction propels Omantel and Zain into a new era, bringing together a unique portfolio of leading telecom operations with balanced assets for profitability and growth. The transaction will bring economies of scale and sizable synergies making the new group more agile and efficient.
Omantel said synergies will come from integrating the wholesale network with Zain’s, merging operations such as procurement, cooperating across commercial activities and through shared investments in research and development.
Mamari said Omantel is targeting run rate synergies of over US$80mn per annum.
Omantel will be fully consolidating Zain’s financials and presenting a combined set of fourth quarter and full year 2017 financial results in the next quarter.
The company will finance this transaction with a combination of long-term and bridge loan facilities. The bridge loan facility will subsequently be recapitalised through bond-type instruments.
Credit Suisse acted as exclusive financial advisor and Freshfields Bruckhaus Deringer LLP as legal advisor to Omantel.