Viva Kuwait signs $270m loan with NBK
Kuwait, June 18, 2013
Viva Kuwait, an affiliate of Saudi Telecom Co (STC), has signed a $270 million, five-year loan with National Bank of Kuwait (NBK) to finance the operator's network expansion, it said in a statement on Tuesday.
This borrowing includes a $70 million murabaha facility - a cost-plus-profit arrangement in Islamic finance - from NBK subsidiary Boubyan Bank. The tenor of the financing is five years.
Salman Al Badran, Viva chief executive officer, said: “This strategic partnership will help Viva to further expand and develop its operations by allowing additional investment in its network, services and people and most importantly, diversify the funding sources for its operations and expansions, while preserving its financial strength.”
Adel Al-Majed, Boubyan Bank vice chairman and chief executive officer, said: “Signing a financing agreement of this value reflects the ability and commitment of Kuwaiti banks to shoulder their responsibilities in financing the projects of leading companies which have clear strategy and strong operational activity.
“The current stage requires cooperation among local banks in order to support the expansion plans of companies in view of the government’s plans to stir development in Kuwait.”
Al-Majed added that this agreement comes along with the developments and the growth that Boubyan has achieved, whether on the level of products or services provided to retail or corporate customers, noting that the Bank’s 2010-2014 strategy aims at supporting and financing small and medium-size companies with high creditworthiness and ambitious plans.
Viva, which competes with Zain and Ooredoo (Qatar Telecom) subsidiary Wataniya, has built a 27 percent market share since launching services in 2008, according to Zain's first-quarter earnings statement.
STC owns 26 percent of Viva Kuwait. The affiliate has yet to list on the Kuwait bourse nearly five years after completing an initial public offer of shares. – Reuters & TradeArabia News Service