Saudi Arabia regulator to resume trade in Mobily shares on Thursday
telecommunications firm Mobily insisted on Wednesday it could meet all its
debts despite announcing last week that it had suffered a $243 million loss in
2014 and expected to breach covenants on long-term loans.
"The company does not anticipate
difficulties with respect to future financing repayments and costs,"
Mobily, also known as Etihad Etisalat, said in a stock exchange statement.
The market regulator, the Capital Market
Authority, subsequently said it would permit trading in Mobily shares to resume
on Thursday. The shares have been suspended for a week in response to the
company's financial troubles.
Once one of the market's hottest stocks,
Mobily ran into trouble late last year when it began disclosing accounting
errors related to the excessive booking of revenue from wholesale broadband
leases and mobile promotional campaigns.
Last week it restated its 2014 earnings,
saying it had suffered a $243 million loss instead of the $58.6 million profit
which it had reported in its unaudited numbers in January.
The CMA has launched an investigation
into Mobily on suspicion the company violated one of its market listing rules
and two articles of the Capital Market Law, including provisions against
Mobily said on Wednesday it did not
expect to meet a net-debt-to-EBITDA (earnings before interest, taxes,
depreciation and amortisation) covenant as of last Dec. 31 under its long-term
financing facilities with various lenders.
That covenant required a minimum EBITDA
of 5.57 billion riyals over the previous four quarters; the company's EBITDA
for 2014 was short of that amount by 2.67 billion riyals, of which 2.51 billion
riyals was due to provisions and adjustments related to the company's financial
results, it said.
However, Mobily added: "Management
is confident that discussions with the lenders to reset the net-debt-to-EBITDA
financial covenant will be successful during the second quarter of year 2015.
"Mobily is committed to continue to
meet its obligations as they become due in the normal course of
A total of 2.4 billion riyals of
financing facilities will come due in 2015 and 2.1 billion riyals in 2016, with
the rest of the company's debt spread across the period until 2024, Mobily
It said its assets totalled 47.5 billion
riyals as of Dec. 31, up 2.3 percent from a year earlier, while total
liabilities were 28 billion riyals, up 21 percent.
Shares in Mobily, which is 27.5 percent
owned by Abu Dhabi-listed Etisalat, have plunged to 35.30 riyals from an
intra-day peak of 98.50 riyals hit last May.