Loss-making telecom operator Zain Saudi has reached an agreement to extend the outstanding $2.3bn on an Islamic loan facility by five years, the company said in a bourse statement on Monday.
Zain Saudi, 37-percent owned by Kuwait's Zain, said it has converted the $2.4bn Islamic loan to an amortizing facility and has repaid a portion of it from internal resources.
The outstanding $2.3bn has been extended for five years, with 25 percent of the loan due in the last two years of the extended period and the remaining 75 percent on maturity at July 31, 2018.
The murabaha facility - a sharia-compliant cost-plus-profit arrangement - was originally due in 2011, but has been put back multiple times.
Zain Saudi, which has yet to make a quarterly net profit since launching services in 2008, earlier in June received government approval to defer payment of licence-related fees that could total around $1.49bn over seven years.
The new credit facility sees profit margin decreased by 18 percent with the possibility of further reduction going forward, Zain Saudi said in a bourse statement on Monday.
Al Rajhi Bank, Arab National Bank, Banque Saudi Fransi and Credit Agricole were bookrunners for the facility, Zain Saudi said.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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