Zain Saudi extends $2.4bn loan term again
Riyadh, January 30, 2013
Zain Saudi has extended the maturity of a 9 billion-riyal ($2.40 billion) Islamic loan for another four weeks, it said on Wednesday, the seventh time the loss-making telecoms operator has deferred payment.
The company, an affiliate of Kuwait's Zain, has agreed with lending banks to put back the maturity of the murabaha facility - a sharia-compliant cost-plus-profit arrangement - which was originally due in 2011 until February 27, it said in a statement to Saudi Arabia's bourse.
The operator, which reported a reduced fourth-quarter loss, said it would use the extension to conclude negotiations with lenders over a new long-term financing agreement, but also warned the existing facility could be further extended.
It cited similar reasons when announcing previous extensions, with the most recent ending on Janaury 30.
The original 9.75 billion riyals facility was agreed in July 2009 - Zain Saudi repaid 750 million riyals from part of the proceeds of last year's capital restructuring - and was arranged by Banque Saudi Fransi.
Zain Saudi has not made a quarterly net profit since launching operations in 2008 and its debts stood at 19.5 billion riyals as of December 31.
The operator has struggled to compete against better-resourced rivals Saudi Telecom Co (STC) and Mobily, an affiliate of UAE's Etisalat , which between them dominate the market. - Reuters