Zain KSA signed an agreement on Wednesday for the sale and lease back of tower infrastructure. The agreement, signed with IHS Holding Limited, is an important step in terms of financial and investment impact.

 This came after Zain KSA announced on 28 November 2018 that the Board of Directors of the company had approved the offer from IHS Holding Limited- regarded as the largest cell tower operator in the markets of Europe, Middle East and Africa and the third largest independent tower company in the world - to sell and lease back its passive towers.

The agreement was signed by Eng. Sultan bin AbdulAziz AlDeghaither, CEO of Zain KSA, and Mr. William Saad, COO of IHS Holding Limited, at the headquarters of Zain KSA in Riyadh.

Zain KSA stated in a press release that the agreement is “for the sale of infrastructure of 8,100 towers, for 2.52 billion riyals value, and lease back for 15 years with the possibility of extension for an additional 5 years. Furthermore, it includes the building of an additional 1,500 new towers over the next 6 years.”

The original transaction valuation was SAR 2.43 billion which has been revised to SAR 2.52 billion. Sales proceeds will be used to reduce Murabaha financing by SR 2.52 billion, thus reducing funding burdens, and allowing the Zain KSA team to invest and focus on on the delivery of more data monetization initiatives and customer enhancing services to offer them the best data experience in the Kingdom.

Under the terms of the agreement, Zain KSA is selling only its passive, physical infrastructure to IHS and will retain its intelligent software, technology and intellectual property with respect to managing its network. 

Zain KSA also indicated that “the final agreement is subject to the approval of the Communications and Information Technology Commission and the financing authorities,” adding "Any significant developments will be announced."