Zain Saudi extends $2.3bn loan by five years

Loss-making telecom operator has yet to make quarterly profit since launching services in 2008

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.

Related:
Companies
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Further reading

Features & Analysis
Inside Google's brave new world

Inside Google's brave new world

The $500bn technology giant is extending its reach into hardware...

Under attack: how to beat the hackers

Under attack: how to beat the hackers

The smarter technology gets the more opportunities there are...

After all the hype, what's the future for Hyperloop One

After all the hype, what's the future for Hyperloop One

Los Angeles-based Hyperloop One may have struck a deal this month...

1
Most Discussed
sponsoredTracking