Zain affiliate agrees with banks to put maturity of the murabaha facility until Jan 30, 2013
Zain Saudi extended the maturity of a 9 billion riyals ($2.40 billion) Islamic loan for another six weeks on Wednesday, the sixth time the loss-making telecom 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 - originally due in July 2011, until Jan. 30.
A longer term deal appears to remain elusive.
The firm said the purpose of this extension was to allow it and its lenders the opportunity to finalize a new long-term financing agreement to replace the existing one. It cited the same reason when it previously extended the loan on Nov. 28.
"Subject to the further consent of the lenders of the murabaha facility, the maturity date may be further extended," Zain Saudi said in a statement to the Saudi bourse.
Zain Saudi has not made a quarterly net profit since launching operations in 2008.
Last month, it said its third-quarter loss widened by 2 percent over the prior-year period, while for the nine months to Sept. 30 its revenue fell 6 percent and costs rose 3 percent.
The company's debts stood at 19.4 billion riyals as of Sept. 30 and it has struggled to compete against better-resourced rivals Saudi Telecom Co (STC) and Mobily, an affiliate of United Arab Emirates' Etisalat, which between them claim nearly 90 percent of the kingdom's mobile subscribers.