Zain Saudi postpones $2.6bn loan maturity
Jeddah, September 29, 2012
Indebted telecom operator Zain Saudi has for a second time extended the maturity of a SR9.75 billion ($2.6 billion) loan by two months, it said in a bourse statement on Saturday.
"The firm announces that on September 26 it has received approval from lenders to extend the maturity date for the joint Murabaha by two additional months, changing the maturity date to November 28," the statement said.
The loan was initially due in July but was extended to September 27.
The firm said it had already paid back part of the loan, SR750 million on August 27 and is in the process of finalising a long-term finance agreement to replace its current loan.
Saudi Arabia's third telecom company by market share has been struggling with losses and launched a $1.6 billion rights issue in July to boost its balance sheet and help it fight back against rivals.
The rights issue was oversubscribed after Kuwait's Zain raised its stake in Zain Saudi following a weak response from other shareholders.
Zain Saudi, in which Kuwait's Zain holds 37 per cent, has yet to make a quarterly net profit nearly four years after launching services.
Zain Saudi has struggled to compete against Saudi Telecom Company, the Gulf's biggest operator, and Etihad Etisalat. Its share of the kingdom's mobile market fell to 12 per cent last year from 18 per cent in 2009.
The company paid $6.1 billion for a 25-year telecom licence and racked up SR10.1 billion in accumulated losses by March 31, forcing it to cut its capital prior to the rights issue in July.-Reuters