Kuwaiti investment firm KIPCO hires Goldman Sachs for OSN sale

Kuwait Projects Co (KIPCO) , the Gulf state’s largest investment company, has hired Goldman Sachs to advise it on the sale of its majority stake in pay-television operator OSN, sources familiar with the matter told Reuters.

OSN, which this year signed its first partnership deal in the region with Netflix, posted a 10 per cent year-on-year fall in income for the three months to Sept. 30, an OSN spokeswoman said.

KIPCO and Goldman Sachs declined to comment.

KIPCO said in the results, released last week, that the company’s board had approved initiating a plan to divest its 60.5 per cent equity interest in Panther Media Group, also known as OSN, and had engaged an international investment banker for the purpose. It did not disclose the name of the banker.

Dubai-based OSN has been facing fierce competition in a changing entertainment landscape that has involved a move away from traditional paid television providers.

“OSN is a material investment for KIPCO and represents around 26 per cent of its portfolio in value, but ultimately OSN’s profitability has been negative since 2016,” said Dion Bate at Moody’s Investors Service Middle East. “Questions remain about the timing of the sale and how much they will receive for the asset.”

With the rights to broadcast into countries across the Middle East and North Africa, OSN has more than 180 channels, according to its website. Its other shareholder is Mawarid Group.

OSN faces subdued demand in its core markets due to piracy, geopolitical factors and fiscal reforms by governments which have led to sizeable expatriate populations leaving some of its core markets, said Anuj Rohtagi, director of group financial control at KIPCO in KIPCO’s third-quarter earnings conference call on Nov. 15. He added OSN was taking action to cut costs and attract new customers.

It is not the first time KIPCO has explored offloading at least some of its stake in OSN. In 2014, it said it planned to start the process for an initial public offering of OSN shares.