Thursday, November 4, 2010

Interview with the Chairman of Etisalat regarding the Etisalat – Zain deal

ABU DHABI, United Arab Emirates, Wednesday, November 3rd 2010 [ME NewsWire]:

Q1 – Do you believe that the Etisalat–Zain deal represents added value for Etisalat?

According to our preliminary studies, the deal provides excellent integration into Etisalat’s operations, taking into consideration that Zain’s geographic footprint complements that of Etisalat to a large extent, and these are the Sudan, Iraq, Kuwait, Jordan, Bahrain, Lebanon and Morocco markets. We believe that this deal represents excellent value for our shareholders.



Q2 - Do you expect the deal to face any obstacles?

Matters are still at an early stage, and the information and data currently available to us are partial. Once the rigorous process of Due Diligence is completed, the picture will become clear and we will then be in full possession of the pertinent details. Based on that, the results of this exercise will be presented to the Board of Directors to make the decision. It must be said here that Zain’s performance is good and the company enjoys an excellent reputation and has a highly qualified and professional staff.



Q3 – Considering what’s happening on the international market, do you believe that the timing of the deal is appropriate?

The Gulf region enjoys a very strong and robust economy, built upon sound foundations. The region enjoys outstanding and effective partnerships between the public and private sectors, a fact which mitigates investment risks to a large extent. Therefore I do believe that the timing is extremely apt, particularly with regards to operational and finance issues. However, I must add that the issue of good timing is directly linked to the speed by which the experts can perform their duties in order for us to make decisions based upon sound, data driven foundations.



Q4 – You have invested in a number of countries since 2004. Do you see this deal as a crowning achievement of these investments?

Etisalat’s strategy is based upon sound foundations, one of the most important of which is expansion into regional and international growth markets which offer great opportunities to increase and diversify our sources of revenue. It’s a strategic decision which has been affirmed by Etisalat’s shareholders and Board of Directors. Our regional presence consolidates our position among the biggest international telecommunications companies and we believe that this deal will provide positive returns to Etisalat and its shareholders


It’s also important to note that the telecommunications sector is a dynamic, fast developing one, which usually exceeds growth forecasts and expectations. We must therefore keep pace with these developments to maintain our leading position.



Q5 - Can you give us your thoughts on the positives and negatives of this deal?

In fact, there are no negatives as such; only challenges which we must take into consideration and deal with in a very precise and prompt manner. And there are solutions to these challenges. I also hope that the due diligence exercise does not reveal any surprises. As for the positives, Zain is a very well run company which occupies the pole position in many of the markets in which it operates, including Sudan, Iraq, Kuwait and Jordan. We will be able, through unifying our resources and integrating our networks, to provide our customers with a wide variety of competitive products and world class services.



Q6 – Have some shareholders shown hesitation with regards to this deal?

100% agreement on a deal of such magnitude in the private business sector is a rare occurrence. However, as time passes and the picture becomes clear, and with details being known, hesitation will subside. We devote the proper importance to these opinions and it is my duty to convey all the details to the Board of Directors in the utmost transparency and clarity.



Q7 - Does the deal have the support of the Etisalat Board of Directors?

We at the Board of Etisalat work within a clear and unified vision. As Chairman of the Board of Directors, I listen to the opinions of all Board members and discuss all details with them. I’m assisted in this work by a highly qualified and experienced executive team, which allows us to finalize the work within the right timeframe.


Etisalat’s Board of Directors has agreed to submit a conditional offer through AlKhair National for stock and real estate Company, valued at KD 1.7 per share to purchase 51% of Zain's total issued share capital. Etisalat and Alkhair have agreed to enter into an exclusive discussion for a limited period of time.


Q8 – How do you see your relationship with Al Khorafi Group?

Al Khorafi Group is a highly reputable conglomerate which is considered to be an important pillar of the economy, and they command our total respect. We have worked with them with absolute transparency and clarity and they have been very reasonable and cooperative.


Q9 – Is their Governmental support for this deal in the two countries?

The UAE-Kuwait relationship is a shining example of deep brotherly relationships. Kuwait plays a vital role in the region, and we hope that inter-Gulf and inter-Arab economic relationships are strengthened through such partnerships which are based on professional foundations.



Q10 – Is your offer a final one?

The offer remains conditional until the process of due diligence in completed and we hope to start conducting, during the next few weeks, the due diligence exercise into Zain and its subsidiary companies. The results of this exercise will be presented to the Etisalat Board of Directors upon its completion in order to take the necessary decisions.


For media enquiries, please contact:

Mr. Iyad Al Zoubi –

Senior Manager - International Media Relations, Etisalat

Tel: 02 6182173 -Fax: 02 6334448,

Email: ialzoubi@etisalat.ae

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