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Zain shareholders elect new board, OK $3 bn dividend

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CIOL Bureau
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KUWAIT: Shareholders in Kuwaiti telecoms group Zain elected a new board on Tuesday, including a top executive from Kuwait's family conglomerate Kharafi Group, and approved a $3 billion dividend for 2010.

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The new three-year board includes Bader al-Kharafi, the vice chairman of Kharafi Group who anchored a failed attempt to sell a stake in the company, and Shaikha al-Bahar, the Kuwait chief executive for National Bank of Kuwait.

UAE telecom firm Etisalat scrapped its $12 billion offer to buy a controlling stake in Zain last month, citing Zain's divided board, extended due diligence and regional unrest.

Etisalat, the Gulf's largest telecom firm offered last year to buy a 46 per cent stake in Zain for 1.7 dinars a share from a consortium led by major Zain shareholder Kharafi Group.

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Analysts expect the company to remain for sale but buyers would likely bid below the 1.7 dinars offer from Etisalat as they will miss the dividend payout.

The 200-fils-per-share dividend, which follows the Kuwaiti telco's $9 billion sale of its African assets to India's Bharti Airtel, will be distributed to shareholders within the next 10 days, Zain's Chairman Asaad al-Banwan said in the meeting.

Zain shares fell 1.5 per cent on the Kuwaiti bourse on Tuesday. The broader index .KWSE closed flat.

Separately, Zain's Saudi Arabian unit said it signed a two-year refinancing agreement worth 2.25 billion riyals ($600 million) on Tuesday to help its capital projects and meet previous debt obligations.

Saudi's Kingdom Holding and Bahrain Telecom (Batelco) are bidding to buy Zain's 25 per cent share in the Saudi unit. Offloading the 25-per cent holding in Zain Saudi was the pre-requirement of the takeover of parent Zain by the Etisalat.

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