Zain in Africa: to sell or not to sell?

Abstract

Zain has confirmed that it is open to sell its African operations, a move which suggests that the owners want to divest themselves of Zain as a strategic asset and treat it as a portfolio asset.

Table of Contents

• Executive summary
• In a nutshell
• Ovum view
• Zain at a cross-road
• Mid 2009 - a potential strategy overhaul
• Zain in Africa - future hangs in the balance
• Zain' s owners are having a rethink
• Fair valuation is the only obstacle to a sale
• Zain' s financial highlights
• There is a noticeable financial problem
• Debt is a moderate issue for Zain
• Overall Zain Group' s performance is satisfactory
• The wider implications of a sale
• Who might consider buying it?
• Another change of brand
• A sale ends Zain' s ambitions to become a global player
• Zain' s selling price will be an indicator of emerging market prospects
• A sale would change the view of the global mobile market
• A sale would influence the perception of Middle East investors

List of Figures

• Figure 1: Quarterly revenue growth for Zain Africa: 1Q08/1Q09
• Figure 2: Quarterly EBITDA growth for Zain Africa: 1Q08/1Q09
• Figure 3: Quarterly net profit growth for Zain Africa: 1Q08/1Q09
• Figure 4: Quarterly EBITDA margin growth: 1Q08/1Q09
• Figure 5: Net debt/EBITDA: 2007 and 2008
• Figure 6: EBITDA margin: 2007 and 2008
• Figure 7: Zain' s brand evolution: Kenya and Nigeria