We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Tue 12 Feb 2008 01:36 PM

Font Size

- Aa +

Saudi Telecom to borrow $2.6bn for Oger buy

Telecom turns to local banks to finance purchase of 35% stake in Oger Telecom.

Saudi Telecom (STC) said on Tuesday it would borrow 9.6 billion riyals ($2.56 billion) from local banks to finance its purchase of a 35% stake in Oger Telecom.

"We are at a very advanced stage of talks to borrow 9.6 billion riyals to finance this deal," Chairman Mohammed Al-Jasser said in an interview on Al Arabiya Television.

The largest Arab telecoms firm by market value would take loans from local banks and could look at selling Islamic bonds in the future.

Al-Jasser is also deputy-governor of the kingdom's central bank which has been struggling to manage a surge in liquidity and inflation.

"Local banks are very competitive and they demand getting the lions' share so we will not seek other sources of financing," he said.

Standard & Poor's on Monday gave STC an A+ long-term foreign currency corporate credit rating, fifth from the top of investment grade.

Moody's Investors Service also assigned A1 long term local and foreign currency issuer ratings to the company.

"After the ratings, we will study the issue of sukuk to finance any company needs or refinance these loans when the market is ready," Al-Jasser said.

STC completed its purchase of Dubai-based Oger Telecom earlier this month for 9.6 billion riyals, gaining access to markets from Turkey to South Africa.

STC was looking to borrow at least 5.76 billion riyals to help finance the purchase, three bankers told newswire Reuters on Monday.

Arabian Business: why we're going behind a paywall

For all the latest banking and finance 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.