Following talks between India’s Bharti to buy Zain Group’s Africa assets, Bharti lost $3.6 billion in market capitalization, a report on the website Livemint has said.
But following last Friday’s closing price the loss in market capitalization had narrowed to $1.3 billion.
One of the clarifications by the company was that the $1.7 billion debt component in Zain Africa’s enterprise value (EV) is inclusive of the share attributable to minority shareholders, the report indicated. Besides, Zain has recently started operations in Ghana, and being in a start-up mode, the operations are running losses even at the Ebitda (earnings before interest, taxes, depreciation and amortization) level. Excluding Ghana, Zain Africa’s Ebitda margin improves to 33.3% from the reported level of 31.4%, it added.
In effect, Zain Ghana will have no significant importance to Bharti’s decision to buy Zain’s Africa operation.
Zain started operations in Ghana in December 2008 as the fifth mobile phone operator and currently has about 1.2 million subscribers out of the total subscriber list of over 15 million.
By Emmanuel K. Dogbevi