When a proposal to sell a majority stake in Zain was first floated back in September, we were skeptical to say the least. The purchase price seemed insanely high, the buyer didn't have a lot of credibility, and management of the company was nowhere to be seen or heard.

As time goes on, the deal keeps looking shakier. Zain reported horrible Q3 results and revealed a serious debt load, the main proposed backer of the takeover balked at the price, Zain's acquisition of PalTel in Palestine has fallen apart, and nobody has come forward with any serious cash or committment to back the deal.

Today, India's junior minister for telecommunications told parliament that the country's two biggest state-owned telcos, BSNL and MTNL, have not joined any consortium to buy Zain. This reiterates plenty of comments made in recent months that neither company has committed to the deal.

But this time, the comment comes a few days after India's Business Standard newspaper said the deal - at least in its present form, was dead.

Kuwait's Kharafi Group, Zain's biggest shareholder and the orchestrator of the sale, has said it expects the sale to happen by January. So if this deal isn't done in the next two months, it probably wont happen.

My take on the whole deal? If something happens, it will be a direct sale between Kharafi and the Indian telecom companies - unlikely to involve either the Vavasi Group (original organisers of the deal) or Syed Bukhary (the Malaysian billionaire listed early on as an investor in the deal). And it won't be priced anywhere near the US$13.7 billion that was thrown around a few months ago.

More likely though is that this deal will not happen. That is a bad result for Zain, which is probably the best managed Arab telecommunications company, doing some things that are  genuinely innovative a global scale. Not only has this proposed deal scuppered plans to sell of Zain's African businesses - it has cast a shadow over the company's management team, who seemed to be taken by surprise by the announcement that their company was about to be sold.

It's CEO, Saad al-Barrak, has the biggest mouth in Middle Eastern telecoms, and is known not just for colourful talk but for building Zain into a genuinely exciting company. There are  plenty of businesses in the region that would love to have him running the show, but his silence and apparent powelessness over the fate of his company in the last few months could also hang over his future.  

For Kharafi, announcing such a big deal only to have it fall apart could also be embarassing. Not only could it turn out that their partner, the Vavasi Group, wasn't all it was made out to be - they could also be left unable to get the premium price tag that they advertised to other shareholders. And in trying to do the deal at all, Kharafi have shown that they don't want to remain long-term Zain investor, which hurts both Zain, and Kharafi's chances of getting a decent price for their Zain shares.

(Pic by Salah Malkawi for The National)