Zain Telecom, which sold its African business to Bharti for $10.7 billion, today said it has received $7.868 billion of cash proceeds from the Indian company.
"This transaction has resulted in aggregate net cash proceeds of $8.968 billion. Zain has received $7.868 billion of cash proceeds from Bharti. Over the next six months, Zain expects to receive up to an additional $400 million upon certain milestones being achieved," the Kuwaiti telecom company said in a statement.
The balance of $700 million is due one year from completion of the deal, as per the original agreements signed on March 30, 2010.
Soon after the signing of the deal, Zain had said it would earn $3.3 billion from the $10.7 billion deal with Bharti.
In fulfillment of its debt obligations, Zain has repaid the $4 billion revolving credit facility which the company entered into in July, 2006. Going forward, Zain intends to utilise the remaining proceeds to pay dividends and to attend to other corporate matters, it said.
The company said it has now satisfied all conditions precedent to closing the sale of its 100 per cent stake in Zain Africa BV to Bharti Airtel.
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Under the terms of the original agreements, Zain has licensed the use of the "Zain" brand and related trademarks to Bharti in all 15 African operations for an interim period.
Zain Chairman Asaad Al Banwan said: "This sale crystallises the significant value we have created for our shareholders over the last five years. The board of directors will consider the best use of the remaining proceeds to further enhance value for all stakeholders."
Zain Group Chief Executive Officer Nabeel Bin Salamah said: "Zain stands at the threshold of a new era, one that will allow the company to focus on its highly cash generative Middle Eastern operations, investing in new growth opportunities in our existing markets."
Bharti Chairman and Managing Director Sunil Bharti Mittal said: "We are delighted at the closure of this transformational deal."
UBS Investment Bank acted as lead financial advisor, while BNP Paribas acted as co-advisor to Zain on this transaction. Linklaters was the legal advisor for Zain in this transaction.