Zain KSA signs agreement to sell and lease back tower infrastructure for revised amount of $672m

Zain Group announces that the board of directors of Zain Saudi Arabia (Zain KSA) has signed an agreement to sell and lease back the passive physical infrastructure of its mobile tower portfolio to IHS Holding Limited (IHS) for circa SAR 2.52 billion (USD 672 million). 

This signing came after Zain KSA announced on 27 November 2018 that the Board of Directors of the company had approved the offer from IHS Holding Limited to sell and lease back its passive towers. It should be noted that the original transaction valuation of SAR 2.43 billion has been revised to SAR 2.52 billion (US$672 million).

The agreement was signed by Eng. Sultan bin AbdulAziz AlDeghaither, CEO of Zain KSA, and Mr. William Saad, COO of IHS Holding Limited, at the headquarters of Zain KSA in Riyadh.

Zain KSA has more than 8,100 mobile telecommunication towers located in prime and strategic locations across the Kingdom. IHS is the largest independent tower operator in Europe, Middle East and Africa by tower count and the third largest independent multinational tower company globally.

Under the terms of the agreement, Zain KSA is selling only its passive, physical infrastructure to IHS and will retain its intelligent software, technology and intellectual property with respect to managing its network. 

Bader Al Kharafi, Zain Vice Chairman and Group CEO; & Zain KSA Vice-Chairman said, “Zain KSA is transforming financially, operationally, and strategically, and this evolution is aimed at the operator emerging as a more successful digital lifestyle services provider and delivering additional shareholder value. Our agreement with IHS is pioneering in many respects, not least in the way it allows us to reduce debt and free up capital to invest in other areas of the business focused on customer satisfaction and service delivery. We see this milestone agreement as extremely beneficial to all stakeholders, and we are pleased to have been among the first in the region to embrace it.”

The agreement, once approved, will see the sale of the infrastructure of 8,100 towers with a lease back period of 15 years, with a 5-year renewal option. Furthermore, it includes the building of an additional 1,500 new towers over the next 6 years.  

Sales proceeds will be used to reduce Murabaha financing, thus reducing funding burdens, and allowing the Zain KSA team to invest and focus on the delivery of more data monetization initiatives and customer enhancing services to offer them the best data experience in the Kingdom. 

The final agreement between Zain KSA and IHS Holdings is subject to the approval of the Kingdom’s Communications and Information Technology Commission and financing authorities. Any related  developments will be announced immediately.

This content extract was originally sourced from an external website (Zain) and is the copyright of the external website owner. TelecomTV is not responsible for the content of external websites. Legal Notices

Email Newsletters

Sign up to receive TelecomTV's top news and videos, plus exclusive subscriber-only content direct to your inbox.