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Mon 3 Jun 2013 02:09 PM

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Zain Saudi gets nod to defer $1.49bn payments

Indebted telecoms operator receives gov't approval to delay licence fee payments

Zain Saudi gets nod to defer $1.49bn payments
GCC telecoms

Indebted telecoms operator Zain Saudi has received government approval to defer licence fee payments totalling $1.49bn over seven years, sending its shares on Monday to an eight-month high.

The rescheduled payment will be treated as a commercial loan, with the first payment due in 2021, the company said.

Shares in Zain Saudi, which also has $3bn of loans maturing this month, were up 9.7 percent at 9.65 riyals at 1.45pm UAE time, reaching their highest level since October 2012.

The firm, which had a 15 percent share of Saudi's mobile subscribers as of the end of 2012, reached an agreement with Saudi's Ministry of Finance to reschedule its annual licence fee of SR800m ($213.3m) for the coming seven years, the company said in a bourse statement late on Sunday.

The firm, 37-percent owned by Kuwait's Zain, has yet to make a quarterly net profit since launching operations in 2008.

Zain Saudi agreed to pay $6.1bn for Saudi Arabia's third mobile network licence, valid for 25 years but has struggled to compete with Saudi Telecom Co (STC) and Etihad Etisalat (Mobily).

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