Zain Group, the leading mobile telecoms operator in the Middle East and Africa, has raised US$4.49 billion through a capital increase in Kuwait, with 99 percent of all shareholders subscribing.
In a press statement released by its Kenya subsidiary, Zain Kenya, Wednesday, the Kuwait-based firm said the funds raised would 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, said the group.
“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 Saad Al Barrak,.
He added that the proceeds of the capital increase would 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 5 years, and it is now present in 22 countries on two continents serving over 50 million active customers.
Its one of the three mobile phone service providers in Kenya, which is led by market leader Safaricom.
Also in the Kenyan market is the new launched Orange Kenya, which rolled out its services 10 days ago.
A fourth player, Econet, is entering the market in November.
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 percent of the total number of shares they held on this date.
The capital increase subscription price was 850 fils (approximately US$3.20) per share i.e. a par value of 100 fils per share plus a premium of 750 fils, the firm said.
The subscription period commenced 17 August 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,” said Dr Al Barrak.
“We expect these investments to bring about substantial increases in the Group’s future revenues and net profits,” he said.
The National Bank of Kuwait (NBK), through its local and international branches, acted as the receiving bank for the capital increase.
