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The General Assembly for PALTEL approves the strategic partnership with ZAIN

2009-06-11

Ghazi Bani Odeh and Jaafar Sadaqa wrote:
The extraordinary general assembly of the Palestinian telecommunications company approved yesterday the strategic partnership with ZAIN, by integrating PALTEL with ZAIN Jordan in a deal worth about$3.5 billion. Under the decision of the assembly, PALTEL"s capital will be increased to about JD338 million, by issuing 207 million new shares that will be allocated to ZAIN and Saudi investor, as opposed to ownership of PALTEL to Bella which owns ZAIN Jordan by %100. Under the deal, will be established a new entity in which has ZAIN will own %56.5 of it by about 179 million shares, compared to %41.5 to the shareholders of PALTEL by about 131 million shares, and %2 to the Saudi investor Suleiman Abdel Mohsen by about 6.5 million shares. The General Assembly authorized the Board of Directors of PALTEL the preparation of the prospectus and to take all necessary action to take approvals from the official Jordanian and Palestinian authorities and the completion of this transaction, which is the largest in the Middle East. The assembly had held yesterday, an extraordinary meeting in Nablus and Gaza, in the presence of Chairman of the Board Sabeih Al Masri, members of the board, Chairman of the Board of Directors of Palestine Development and Investment PADICO – the main shareholder in PALTEL- Munib Masri, members of the Board of Directors and Executive Management, Vice Chairman of the Board, Chief Executive Officer of ZAIN Dr. Saad Al Barrak, the company observer Nizam Ayoub which announced in the beginning of the meeting its legality, by participation of shareholders with%63.1 of the shares of the company, in addition to representatives of the Capital Market Authority and Palestine Securities Exchange. The deputy Executive Chairman of PALTEL Kamal Abu Khadija presented the details of the agreement, before the chairman"s requesting the General Assembly to approve the deal, which was passed unanimously. Abu Khadija said: The deal was based on assessments of international consulting firms, where Bella had been valued as of JD 1.377 billion and PALTEL had been valued about JD 974 billion.

Al Masri: a deal to penetrate the regional dimensions:
Sabeih  Al Masri said: after the transaction; PALTEL"s shareholder has become an owner of a regional company, after he has only contributed to a national local company, as the new company"s operations include Mobile Communication in Jordan; in which gives the shareholder the opportunity to present more risk diversification and distribution of multiple operations on stocks in markets linked to each other socially and geographically; will affect positively on the opportunities for growth and expansion.

Al Jaber: the transaction is based on a prior vision:
From his side, Al Jaber said: The deal was based on a prior vision, and indicated the negotiations between PALTEL and ZAIN five years ago, that did not succeed in a timely manner, and returned again to open a dialogue within a vision that ended with the adoption of an integration between them recently. And cleared: The deal to merge with ZAIN was launched from two main essentials; the first is relating to the direction of the telecommunications sector in general and the decline in employment in a small geographical location such as Palestine.

 
Allocating 2008 dividends:
He added: "Now our subscribers" base will be without limits and not only of Palestine". He noted that there would be a distribution of the remainder profits of the year 2008 profits that are $ 37 million to shareholders after the completion of understanding with the Palestinian Authority, pointing out that there was a promise from the Prime Minister of that, but as for the retained profits, it will be recycled in the company. He expected that the new entity to achieve a net profit until the end of this year of $ 300 million, he said: "We expect that the executive management of companies PALTEL and ZAIN to report a net profit of about 300 million dollars in the year 2009, and the total revenues of up to one billion dollars.