Zain to pay Airtel $129 mn for settling all claims

NEW DELHI: Bharti Airtel is set to receive $129 million (Rs 850 crore) from Zain Telecom to settle the Indian telco’s claims around litigation in Nigeria and other tax matters.

“Bharti Airtel International (Netherlands) BV and Zain Telecom have reached an agreement, pursuant to which, Zain is to pay to Airtel approximately $129 million for the settlement of all of Airtel's claims on account of the Nigeria Litigation, certain tax matters and associated legal costs,” Airtel said in a statement Thursday.

Under the terms of the pact in 2010, which saw Airtel buy out Zain’s operations in Africa for $10.7 billion, the latter had provided the Indian telco certain indemnities covering the Nigeria litigation and certain tax claims.

After acquiring Zain's telecom business, Airtel ran into a dispute with Econet Wireless — a minority stakeholder in Zain Telecom.

Bharti Airtel lost a court case in Nigeria and potentially faced $3 billion in payouts over a 5% stake claimed by Econet Wireless in its Nigerian unit.

Airtel said that a settlement has been reached with Econet Wireless now.

“A separate settlement has been reached between Airtel and Econet Wireless Limited settling all claims, disputes whatsoever between the two, including in Nigeria and Netherlands,” the India telco said.

While Airtel didn’t provide the specific terms of the settlement with Econet, industry sources said it is paying out a similar amount to Econet.

“With these settlements, Airtel has closed several ongoing major litigations in Nigeria, UK and Netherlands,” the telco added.

Shares in Airtel closed at flat at Rs 309.55 on the BSE, outperforming a negative broader market.

Africa has been an overhang on Airtel’s consolidated results with the continent yet to post a profit. But business in the continent seems to be stabilizing.

For the quarter ended September 30, Bharti Africa’s net loss contracted to $91 million from $170 million, a year ago.