Funds will be used to upgrade its network and expand in Kuwait, says telecoms operator
Kuwaiti telecoms operator Viva, part-owned by Saudi Telecom Co (STC) and the Kuwaiti government, has secured $270m to help fund plans to upgrade its network and expand in Kuwait.
The multi-currency financing agreement was signed with National Bank of Kuwait Group (NBK Group). The deal includes $70m funding from Boubyan Bank, a member of NBK Group, and is for a five year period.
“Today marks the start of a new era for VIVA. 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,” said Salman Al Badran, VIVA CEO.
“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,” added Adel Al-Majed, Boubyan Bank vice chairman and CEO.
Launched in December 2008, Viva is 26 percent owned by Saudi Telecom Company (STC), with 24 percent held by the Government of the State of Kuwait and the reminder by individual investors.
A rapidly increasing customer base helped the mobile operator make an annual profit for the first time in 2012.
It reported a net profit of KD3.9m ($13.69m) for 2012, compared to a net loss of KD14.4m in 2011.
The operator, which competes with Zain and Ooredoo (Qatar Telecom) subsidiary Wataniya, said its customer base rose by 60 percent to 1.6 million last year, enabling it to boost its market share to 29 percent from 20 percent.
Kuwait has no telecom regulator and market share figures are disputed by the rival operators - former monopoly Zain puts its share at 42 percent, with Viva and Wataniya on 21 and 37 percent respectively.
Viva said its 2012 cash flow was KD32.2m, up from KD72,000 a year earlier. It did not publish its annual revenue.
Viva has yet to list on the Kuwait bourse, despite completing an initial public offering in September 2008.
Viva has refused to comment when asked by Reuters in the past to explain the delay. The company remained reticent in its earnings release, stating only that it had filed a listing request with the stock market regulator in February 2012 and was awaiting a response.