Zain inks US$680m Saudi Arabia cell tower deal

Zain inks US$680m Saudi Arabia cell tower deal
Published: 1 April 2019 - 8:41 p.m.
By: CommsMEA staff writer
Zain has signed a major deal for selling and leasing back cell towers.

Zain Saudi Arabia (better known as Zain KSA) has signed an agreement to sell and lease back the passive physical infrastructure of its mobile tower portfolio to IHS Holding Limited (IHS) for about 2.52 billion Saudi Arabian riyals (US$672 million).

The agreement, once approved, will see the sale of the infrastructure of 8,100 towers with a lease back period of 15 years, with a five-year renewal option. Furthermore, it includes the building of an additional 1,500 new towers over the next six years.

The agreement was signed by Eng. Sultan bin AbdulAziz AlDeghaither, CEO of Zain KSA, and Mr. William Saad, COO of IHS Holding Limited, at Zain KSA's Riyadh HQ.

Sales proceeds will be used to reduce Murabaha financing, thus reducing funding burdens and allowing the Zain KSA team to invest and focus on the delivery of more data monetisation initiatives and customer enhancing services.

Zain KSA has more than 8,100 mobile telecommunication towers in Saudi Arabia. IHS is the largest independent tower operator in Europe, the Middle East and Africa by tower count, and the third largest independent multinational tower company globally.

Under the terms of the agreement, Zain KSA is selling only its passive, physical infrastructure to IHS, and will retain its software, technology and intellectual property.

Bader Al Kharafi, Zain vice chair and group CEO (as well as Zain KSA vice chair), said: "This evolution is aimed at the operator emerging as a more successful digital lifestyle services provider and delivering additional shareholder value. Our agreement with IHS is pioneering in many respects, not least in the way it allows us to reduce debt and free up capital to invest in other areas of the business focused on customer satisfaction and service delivery."

The final agreement is subject to the approval of Saudi Arabia's Communications and Information Technology Commission and financing authorities.

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