Batelco to manage Zain Saudi after stake buy: CEO

Bahrain Telecommunications (Batelco) will manage the operations of Zain Saudi after its consortium buys a $950m stake in its rival operator, Batelco’s chief executive told Reuters.

Batelco and joint bidder Kingdom Holding this week were given permission to start due diligence on their bid to buy Kuwaiti Zain’s quarter-stake in its Saudi affiliate, three months after the deal was initially agreed.

The stake sale had hit a snag over management rights, a source told Reuters in May, but Batelco chief executive Peter Kaliaropoulos told Reuters late Wednesday that “all matters have been amicably resolved between all parties.”

“The management contract will be with Batelco as we will have operating responsibility as per regulatory license requirements,” he said.

Management control is a crucial issue because at present Zain receives 2.7 per cent of Zain Saudi’s revenue in management and branding fees, according to a note from HSBC, with these worth an estimated SR2.4 per share.

Kaliaropoulos declined to comment when asked whether these fees would be transferred to Batelco or scrapped altogether, while the future of Zain Saudi chief executive Saad al-Barrak, who formerly held the same position at Zain, is unknown.

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