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Tue 21 Dec 2010 03:39 PM

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Saudi Mobily signs $320m Islamic finance deal

The short-term credit 'highlights the company’s strong financial position' - official

Saudi Mobily signs $320m Islamic finance deal
BIG DEAL: Etihad Etisalat Co reached an Islamic finance agreement for SR1.2bn that the company may use to expand its network(Getty Images)

Etihad
Etisalat Co, Saudi Arabia’s second-largest mobile-phone company known as
Mobily, reached an Islamic finance agreement for SR1.2bn ($320m) that the
company may use to expand its network.

The
credit facility from Samba Financial Group, National Commercial Bank, Bank
of Riyad, Saudi British Bank and Banque Saudi Fransi is valid for 12
months, the Riyadh-based company said in a statement on the Saudi bourse
website on Tuesday. The facility can be renewed for six months, Mobily said.

The
short-term credit “highlights the company’s strong financial position,” Nader
Nuwayhid, Mobily’s Director of Investor Relations, said by phone on Tuesday. “The
company’s net debt to EBIDTA ratio dropped to 1.14 at the end of the third
quarter.”

Mobily
is tapping financing to expand its phone networks and broadband internet
infrastructure as demand for telecommunications rises in Saudi Arabia.

Mobile-phone users in the kingdom rose 18 percent to 48.6 million at the end of
the third quarter from 41.2 million a year earlier, the telecom regulator
reported December 14.

Mobily
plans to spend more than SR2bn in 2011 to expand its broadband Internet
services infrastructure. The company awarded contracts worth SR799m to
Ericsson, Huwawei Technologies Co and Nokia Siemens Networks, Al Watan reported
on November 13.

On December 16, Mobily signed an agreement in
Ankara, Turkey, to develop a regional cable network, linking the United Arab
Emirates with Turkey, passing through Saudi Arabia, Syria and Jordan

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