KUWAIT/DUBAI (Reuters) - The billionaire chairman of Kuwait’s Kharafi Group has died in Cairo from a heart attack, raising questions about the future of the family conglomerate which has a profound influence on the Gulf state’s economy.
Nasser Al-Kharafi, aged 67, headed the Kuwaiti family-owned firm which has stakes in several listed firms in the country a business empire which spanned from real estate to retail and financial services.
State news agency KUNA said on Sunday that Al-Kharafi died in the Egyptian capital of Cairo after suffering a heart attack. A report from Al Arabiya television, earlier in the day said he died on Saturday. The firm is yet to announce the death officially.
The Kharafi Group was a major shareholder in telco Zain and was also the main proponent of a failed $12 billion stake sale in the firm to UAE’s Etisalat..
News of the unexpected death shook Kuwaiti markets with companies having links with the group plunging in early trade.
“This (the death) will have a dramatic impact on the stock market and the political and economic scenery,” said Naser al-Nafisi, general manager at Al Joman Center for Economic Consultancy in Kuwait.
“He had a powerful influence and a special charisma -- his brothers and sons will not carry the same.”
Zain shares were trading down 3.3 percent on the Kuwaiti bourse at 0820 GMT. They dropped as much as 5 percent earlier in the day. Shares in National Investments, another Kharafi Group-owned company, fell 5.1 percent.
Shares in National Bank of Kuwait, the Gulf state’s biggest lender, also dropped 1.7 percent despite reporting first-quarter results above market estimates. Nasser Al-Kharafi was on the lender’s board and the group had a stake in the bank.
Al-Kharafi was ranked 77th in the 2011 Forbes list of richest people in the world and was estimated to be worth $10.4 billion.
The death of Nasser Al-Kharafi will lessen the importance of the Kharafi group, said Nafisi, with the government -- Zain’s largest shareholder--likely to become more active in the telecoms operator.
The Kharafi Group, walloped by the global financial crisis and a property slump in Kuwait, has been keen to offload its Zain position for more than a year. In 2009, a deal to sell a 46 percent stake to an Asian consortium fell through.
“There’s no definitive amount for Kharafi’s debts because he borrowed from several banks and these are secret, but direct and indirect liabilities are at least $5 billion.”
That means banks will have a major role in deciding what happens to Kharafi assets, Nafisi added.
The group owns a 12.7 percent stake in Zain through one of its units, according to bourse data, but analysts estimate Kharafi’s stake to be around 20 percent through other firms it controls.
The Etisalat deal fell apart in March after the telco pulled out, citing difficulties with Zain’s divided board, extended due diligence and regional unrest.
Last week, Zain shareholders elected a new board, including a top executive from the Kharafi Group, and approved a $3 billion dividend for 2010.
Additional reporting by Matt Smith and Rachna Uppal in Dubai, Editing by Reed Stevenson
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