Dubai: Bharti Airtel's plan to buy most of the African assets of Kuwait's Zain for $10.7 billion (Dh39.3 billion) may face challenges even before it begins its due diligence.

India's largest wireless company's plan can't include Zain's Celtel Nigeria unit until an ownership dispute with Econet Wireless Holdings on that business is resolved, Econet chief executive officer Strive Masiyiwa said.

"Zain Nigeria is not for sale," Masiyiwa said in an interview in Johannesburg on Monday.
For Bharti, troubles in Nigeria, Africa's most-populous nation and the continent's fastest-growing telecommunications market, may be an indication of what it might be up against in the 15 countries where it's seeking to take over Zain's operations.

Kuwait's Mobile Telecommunications, or Zain, and Bharti said in statements yesterday that they will hold exclusive talks until March 25 on the assets.

Bharti fell as much as 9.6 per cent in Mumbai trading, the most since October 6. Zain shares were suspended from trading in Kuwait. They last traded on February 11 when they advanced 3.9 per cent to 1,080 Kuwaiti dinars. The stock has soared 23 per cent in the last week, giving the company a market value of 4.64 billion Kuwaiti dinars (Dh58.98 billion).

Econet, based in a suburb of Johannesburg, is seeking to overturn a 2006 deal in which Celtel bought a 65-per cent stake in Nigerian mobile operator Vmobile, since renamed Zain Nigeria. Econet, with 5 per cent of Zain Nigeria, says it should have had the right of first refusal on those shares.

Case in arbitration

Econet's Masiyiwa said the case is still in arbitration and that until that process has been completed, "Nigeria [operations] cannot be sold, it is not for sale, there can be no due diligence by Bharti or any other party."

Zain bought Celtel International for $3.4 billion in 2005 to expand into 13 African countries, including Kenya and Nigeria.

Senjam Raj Sekhar, vice-president of corporate communications at Bharti, did not reply to an e-mail or a text message seeking a comment on the Nigerian situation. Zain spokesman Ebrahim Adel couldn't immediately be reached for comment on the matter.