October 24, 2017 / 5:15 PM / 5 months ago

LPC-Omantel mandates two banks for Zain acquisition loan

LONDON, Oct 24 (Reuters) - Oman Telecommunication Co (Omantel) has mandated Citibank and Credit Suisse to arrange a bridge loan to back its potential acquisition of a 12% stake in Kuwaiti telecoms group Zain, bankers said on Tuesday.

Omantel signed a non-binding letter of intent with Kuwait-based Al-Khair an investment vehicle of Kuwait’s Al-Kharafi merchant family to purchase its 12% holding in Kuwaiti Telecoms company Zain on October 8. The stake is worth US$946m based on Zain’s current market capitalisation.

Omantel said it would fund the acquisition through a bridge loan on October 16, which bankers say could be around US$1bn. Al-Kahir is still evaluating Omantel’s offer.

This follows Omantel’s purchase of a 9.8% stake in Zain in August for US$846m.

The new deal would give Omantel a stake of roughly 22% in Zain, making it the second largest shareholder, behind the Kuwait Investment Authority sovereign wealth fund, which has more than 24%.

Credit Suisse and Citibank declined to comment. Omantel was not immediately available for comment.

In June sovereign wealth fund Oman Investment acquired a 51%stake in Omantel backed by a US$600m loan.

Intesa Sanpaolo unit Banca IMI (London), Citigroup, Kuwait Finance House and National Bank of Abu Dhabi were the mandated lead arrangers and bookrunners on the loan, which attracted 21 other lenders – mostly Taiwanese banks – in general syndication. The deal matures in April 2020 and pays an interest margin of 230bp over Libor.

Omantel, which is listed on the Muscat Stock Exchange, provides fixed and mobile telecom services in the country. (Editing by Tessa Walsh)

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