Shares in Kuwaiti telecoms firm Zain surge 9 percent after said it expects up to $5 billion in returns from its $10.7 billion deal with Bharti Airtel , after it pays off obligations.

This (deal) will result in shareholders equity of around $9 billion. And after paying specific obligations, the company expects returns of a maximum of $5 billion, Zain said in statement on the Kuwaiti bourse website on Tuesday.

Zain shares surged to a 14-week high on the news after the Kuwait bourse lifted a 2-day trading halt, climbing 9.3 percent to 1.18 dinars, as Kuwait's index <.KWSE> rose 0.8 percent to its highest level since October 28.

The expected returns from the deal will enter the firm's books in the second quarter of 2010, Zain said.

Bharti is likely to finance nearly all the deal's purchase price with foreign currency loans, a person familiar with the matter said on Tuesday.

Distribution of any special dividend from the sale will be a decision for Zain's board and shareholders, Zain added.

The deal marks one of the biggest cross-border transactions ever in the Middle East and a turning point in the long running saga around the third-biggest telecoms operator in the region.

Bharti Airtel said on Monday it is in exclusive talks to buy Zain's African assets, excluding Sudan and Morocco.

Zain said the deal includes a $150 million break fee, payable by either side, if the deal fails.

(Reporting by Eman Goma and Diana Elias; Editing by Thomas Atkins)

Morocco Sudan Bharti Airtel