Zain Iraq Secures Financing for Iraqna Purchase

The National Bank of Kuwait (NBK) has announced a financing package to support the sale of Iraqna, Orascom's subsidiary in Iraq, to Zain Iraq for $1.2 billion. The sale was announced last December following disputes between the parties managing the Iraqna network.

During the August 2007 license auction, Iraqna failed to secure a license, and faced with abandoning its existing GSM infrastructure in the country signed a tie-up with the Kurdish region Korek Telecom. The joint venture allowed Korek Telecom to use the Southern Iraqi infrastructure built up already by Iraqna. However, it was reported that the two companies did not agree on the corporate strategy and in December it was announced that Orascom was to sell Iraqna to Kuwait's MTC, now Zain.

The bank says that Zain Iraq will pay for the deal in two tranches of $600m each, one in 2008 and one in 2009.

NBK Deputy CEO, Shaikha Al Bahar said that NBK was the sole arranger and book runner on the transaction. "We were able to put together a unique deal structure that fit our client's needs. In order to execute the deal, we brought together a group of 12 regional and international banks in a very tight credit market environment and raised $1.8bn, on behalf of Orascom, said Al Bahar. We take pride in this deal that involves two of the top five telecom companies in the region and spans over three counties, Kuwait, Egypt and Iraq."

The National Bank of Kuwait formed a syndicate of 12 regional and international banks, and was able to secure funding of $1.8 billion.

Posted to the site on 23rd June 2008