Kuwait-based Zain Group had to request a repayment extension for its Saudi Arabian unit’s US$2.6bn bank loan because of the delay of its recent rights issue.
Zain Group chief commercial officer Hisham Akbar said the delay to Zain KSA’s US$1.69bn…
Kuwait-based Zain Group had to request a repayment extension for its Saudi Arabian unit’s US$2.6bn bank loan because of the delay of its recent rights issue.
Zain Group chief commercial officer Hisham Akbar said the delay to Zain KSA’s US$1.69bn right issue, held from 10-17 July, prompted it to ask for the two-month extension, which has been accepted by the relevant banks.
“It should be made clear that the extension of [the loan] had nothing to do with any misunderstanding between the company and the banks, with which Zain KSA enjoys a constructive, positive relationship,” he said.
The group increased its stake in Zain KSA from 25% to 37.045% following the completion of the rights issue, which it said was 105.4% oversubscribed.
The issue formed part of a wider capital restructuring process at the Saudi unit, designed to improve its financial position. Beforehand, Zain KSA lowered its capital from SAR14bn to SAR4.8bn (US$3.7bn to US$1.3bn) to reduce accumulated losses.
“[P]roceeds raised from the rights issue are set to be invested in network capacity projects as well as partial repayment of certain financial obligations,” Akbar said.
