Zain scraps ownership restrictions

1 Sep 2009

Kuwaiti telecoms group Zain has announced that it has removed restrictions limiting company ownership by a single party to 5%, Kuwait’s state-owned news agency reports. The decision was approved by Zain shareholders in a meeting on 31 August. Prior to the decision individuals could not hold more than a 2% stake in the firm, while companies could hold no more than 5% of Zain equity, with the exception of state-owned wealth fund Kuwait Investment Authority (KIA), which holds a 24.9% stake in the group. Speculation has been rife in recent months that Zain could be subject to a takeover by a third party, and Etisalat of the UAE stated in August that it would be interested in purchasing a 51% stake in the cellco if an attractive price could be negotiated. KIA has also announced that if terms could be agreed then it would not be adverse to a sale. Zain has been hit by the global economic crisis, citing it as the motivating factor as it shed 13% of its 15,500 strong workforce in May 2009.

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