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Thu 29 Aug 2019 06:45 PM

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Saudi's Mobily seeks to cut cost of $2.1bn debt

Sources say Saudi telecoms operator has held talks with banks to refinance up to $2.1bn of debt

Saudi's Mobily seeks to cut cost of $2.1bn debt
Saudi Arabia’s second-largest wireless operator is trying to benefit from four straight quarters of profit growth.

Etihad Etisalat Co has held preliminary talks with banks to refinance as much SR8 billion ($2.1 billion) of debt as the Saudi Arabian mobile-network operator looks to lower borrowing costs following a turn around in its finances, according to people familiar with the matter.

Mobily, as the company is known, has been gauging appetite from lenders to participate in the refinancing and plans to start formal discussions before the end of the year, the people said, asking not to be identified as the information is private. Banks were told that the firm wants to reduce interest expenses with the new facility, they said.

Saudi Arabia’s second-largest wireless operator is trying to benefit from four straight quarters of profit growth after accounting irregularities discovered in 2014 led to years of losses.

Amid the slump in earnings, Mobily in 2017 refinanced SR8 billion of loans at a rate that was said at the time to be 20 percent higher than the debt it was repaying.

A spokesman for Mobily didn’t immediately respond to requests for comment.

The stock has risen 53 percent this year, the best performer in the four-member Tadawul Telecommunication Services Industry Group Index, and compared with an 8 percent increase in the all-share index of Saudi Arabia’s stock exchange.

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