It seems that it is not a beautiful world for Dr. Saad Al-Barrak after all, as the board of Kuwait’s Zain has accepted his resignation as CEO and Deputy Chairman, and has yet to name a replacement. Following the economic downturn, Zain’s strategy has been under major scrutiny as it spent its way liberally into 22 markets across Africa and the Middle East. The once “mother of all balance sheets” echoes from dryness, as Al-Barrak’s ambitious expansion plans leveraged every penny the company had, only to realize the burdening financing costs of the African Operations were not what the owners hoped for. Al Barrak enjoyed the support of the owners for a long time, but when he missed the turn, targeting Africa when growth was in Asia, his ambitious dreams were shattered as his vision diverged from the vision of the owners.
In an effort to boost investor confidence, the owners leveraged everything they had to deliver a clear message that they will survive without Mr. Al Barrak as Al Khair Group companies closed limit up today. We will never know what is the real reason behind Al Barrak’s resignation, but we are certain that things will be different.
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Loading ...Tags: Al Khair Group, Dr. Saad Al Barrak, Kuwait, Zain
Clearly Mr. Al Barrak had a different strategy than the owners and I think that is the main reason for his resignation.
1) the use of half of Zain’s $4.5bn rights issue at the end of 2008 to buy back shares at a significant premium to the then market price seemingly against management’s wishes (management expected the funds to be available to fund further expansion and investment)
2) the running of an auction process for Zain’s African assets last year at a time when management was still expressing its intention to stick to a strategic plan to become a top 10 global mobile player by 2011.
3) pressure from the board for Zain to pay a large dividend or re-commence share buy-backs at a time when several Zain operations have been somewhat starved of cash
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I have heard that the reason for his resignation,he had influence to stop the deal. did any one heard about it ?
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Saud Reply:
February 7th, 2010 at 7:56 pm
I dont think so. As the CEO of the group he probably has many bonus shares, and he wouldn’t be better off if he ruined a deal that offered such a high premium
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I guess its simple,
Board wanted to see the deal go through, he couldn’t make it happen. He is out.
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there was no deal. who in his mind would buy a no growth company at 2 kd when the stock was trading at about 1.3 give or take?
classic pump and dump by the owners!…
I heard its related to the firing and re-hiring of the CFO
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I heard also about the CFO conspiracy plan and it actually worked out. Rumor says they’re going to distribute 40fils and 10% stock.
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@ Sal:
” 40fils div + 10% stock div”…..what elese can I say but –> Milk and dilute this baby to the nose!
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