Saudi Telecom Co (STC) will need to guarantee a loan for its loss-making subsidiary Viva, according to an analyst with close knowledge of the company.
A newswire reported that Kuwaiti mobile carrier Viva has approached several banks for a US$400m loan,…
Saudi Telecom Co (STC) will need to guarantee a loan for its loss-making subsidiary Viva, according to an analyst with close knowledge of the company.
A newswire reported that Kuwaiti mobile carrier Viva has approached several banks for a US$400m loan, citing two banking sources familiar with the matter. No banks have been mandated yet.
“I was surprised to hear about this,” the analyst told TelecomFinance, arguing with the company’s debt profile. Noting that Viva was in negative equity last year, he cautioned it might be difficult for the company to raise the money with backing by its main investors.
“I think STC will have to guarantee the loan,” the analyst said.
Viva already has some small loans on its books, but has not revealed who the lead managers were on these. “Now we are talking about a much higher amount,” continued the analyst.
Viva completed an IPO in 2008 but has not yet listed on the Kuwait stock exchange. The indebted company filed for listing in February 2012 but has still not commenced trading.
“I think Viva may finally list after they get the financing.” said the analyst. “You can’t launch a company without any equity.”
Viva was launched in 2008 and is part-owned by the government of Kuwait as well as STC.
