Kuwaiti bank to finance sale of Iraqi mobile phone firm

Jun 23, 2008, 13:56 GMT

Baghdad - The National Bank of Kuwait (NBK) announced Monday a finance package to support the sale of Iraqna, the Iraqi mobile phone unit owned by the Egyptian firm Orascom Telecom, to Kuwait's Mobile Telecommunications Co (Zain) for 1.2 billion dollars.

'NBK formed a syndicate of 12 regional and international banks, and successfully raised 1.8 billion dollars, 150 percent more than the deal size, on behalf of Orascom Telecom,' the bank said in a statement posted on its website.

The US-led interim authority, which ran Iraq after the collapse of the former regime in 2003, sold licenses for the building of mobile phone networks to Orascom Telecom, Zain and a another Kuwait firm, the National Mobile telecommunications Co.

Only Zain's subsidiary MTC-Atheer retained its licence after an Iraqi government auction in August.

Orascom's licence went to a Kurdish Korek group for 1.25 billion dollars.

Both firms later formed a joint venture worth 2.2 billion dollars, under which Korek was allowed to use the infrastructure of Orascom, the fourth largest Arab telecommunication firm.

In December, Zain announced it would buy Iraqna through its subsidiary MTC-Atheer.

'Zain will pay for the deal in two tranches of 600 million dollars each, one in 2008 and one in 2009,' NBK said.

The acquisition would give the Kuwaiti firm a total of seven million customers in Iraq, Zaini said in a statement last year.

Iraq's fixed-line telephone network was damaged by decades of wars and international sanctions, which made people increasingly dependent on cell phones.

By the end of 2006, there were around eight million mobile phone users in a country with a population of 26 million, according to Iraqi government figures.