Etisalat will not make a final decision on its proposed US$12 billion (Dh44.07bn) acquisition of Zain until it has completed due diligence at the end of this month.
"Everything depends on the due diligence," Salem al Sharhan, Etisalat's group chief financial officer, said yesterday. "From there, the timeline will be decided. We expect to finish the due diligence by the end of February."
Etisalat offered to buy a 46 per cent stake in the Kuwaiti company for 1.7 dinars a share last September, with the sale of Zain's Saudi Arabian unit among the terms.
Zain rejected three bids on Sunday and no further offers are on the table. But the absence of a sale for the Saudi Arabian unit does not mark a "deal-breaker" in Etisalat's bid for a controlling stake in its parent company, said Mr al Sharhan.
Etisalat already operates in Saudi Arabia under the Mobily brand and acquiring Zain Saudi Arabia would not be allowed by the country's telecommunications regulators.
"I may not call it a deal-breaker. I will call it one of the conditions [to complete the deal]," said Mr al Sharhan. "If [Zain] does not sell [Zain Saudi Arabia], we don't complete the transaction."
Sheikh Khalifa Ali Al Sabah, a member of Zain's board of directors, a shareholder in the company and a member of Kuwait's ruling family, said this week the absence of a buyer for the Saudi Arabian unit meant the Etisalat deal could not proceed. While the deadline to complete due diligence is at the end of this month, that is not when the deal is expected to close, said Mr al Sharhan.
He said Etisalat's stock, which is traded on the Abu Dhabi Securities Exchange, is "underpriced". Ownership of shares in Etisalat is currently restricted to UAE nationals, but talks are under way to allow foreign ownership, he said.
"We are in discussions with [the government to change the law] from a special law to a commercial law," he said. Such a move will help the company raise money from foreign investors which it could use to finance the Zain deal.
Irfan Ellam, a telecoms analyst with Al Mal Capital, said that if Etisalat moved its corporate structure to the UAE's commercial law, investors were likely to be watching how much of the operator it would make available to foreign interests.
Etisalat has already initiated talks with 18 international banks over financing the acquisition.
"Our intention is to finance Zain, if it happens, through debt finance," said Mr al Sharhan. "The total amount is around $12bn."
That amount would be made up of a $6bn 18-month bridge loan, which Etisalat said would be repaid with a bond or sukuk issue. The remainder would be made up of a $3bn three-year loan and a $3bn five-year refinanceable loan.
Mr Ellam said Etisalat would have no problem repaying the debt it would assume. "The only question is how they want to use their cash because they still have cash on their balance sheet," he said.
bflanagan@thenational.ae
Three tips from La Perle's performers
1 The kind of water athletes drink is important. Gwilym Hooson, a 28-year-old British performer who is currently recovering from knee surgery, found that out when the company was still in Studio City, training for 12 hours a day. “The physio team was like: ‘Why is everyone getting cramps?’ And then they realised we had to add salt and sugar to the water,” he says.
2 A little chocolate is a good thing. “It’s emergency energy,” says Craig Paul Smith, La Perle’s head coach and former Cirque du Soleil performer, gesturing to an almost-empty open box of mini chocolate bars on his desk backstage.
3 Take chances, says Young, who has worked all over the world, including most recently at Dragone’s show in China. “Every time we go out of our comfort zone, we learn a lot about ourselves,” she says.
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
What are the GCSE grade equivalents?
- Grade 9 = above an A*
- Grade 8 = between grades A* and A
- Grade 7 = grade A
- Grade 6 = just above a grade B
- Grade 5 = between grades B and C
- Grade 4 = grade C
- Grade 3 = between grades D and E
- Grade 2 = between grades E and F
- Grade 1 = between grades F and G
How has net migration to UK changed?
The figure was broadly flat immediately before the Covid-19 pandemic, standing at 216,000 in the year to June 2018 and 224,000 in the year to June 2019.
It then dropped to an estimated 111,000 in the year to June 2020 when restrictions introduced during the pandemic limited travel and movement.
The total rose to 254,000 in the year to June 2021, followed by steep jumps to 634,000 in the year to June 2022 and 906,000 in the year to June 2023.
The latest available figure of 728,000 for the 12 months to June 2024 suggests levels are starting to decrease.
About RuPay
A homegrown card payment scheme launched by the National Payments Corporation of India and backed by the Reserve Bank of India, the country’s central bank
RuPay process payments between banks and merchants for purchases made with credit or debit cards
It has grown rapidly in India and competes with global payment network firms like MasterCard and Visa.
In India, it can be used at ATMs, for online payments and variations of the card can be used to pay for bus, metro charges, road toll payments
The name blends two words rupee and payment
Some advantages of the network include lower processing fees and transaction costs
