A rights issue by mobile operator Zain Saudi Arabia that closed on 17 July was oversubscribed, reaching US$1.69bn against the US$1.6bn originally expected.
Lead manager Saudi Fransi Capital said that the rights issue was subscribed by more than 632…
A rights issue by mobile operator Zain Saudi Arabia that closed on 17 July was oversubscribed, reaching US$1.69bn against the US$1.6bn originally expected.
Lead manager Saudi Fransi Capital said that the rights issue was subscribed by more than 632 million shares. This equates to SR6.34bn (US$1.69bn), a coverage of 105.4% of the rights issue shares.
The issuing price was SR10 without a premium with Saudi Fransi Capital and Al Rajhi Bank acting as lead underwriters. A day before closing, only 54% of shares available had been sold.
The company reportedly said that US$200m of the rights issue would be used to repay part of a US$2.6bn Islamic loan due in July. It is not yet known how the remainder of the loan will be restructured.
As for the rest of the rights issue, it will go towards repaying shareholders and improving Zain’s network.
The company received approval from its shareholders for the rights issue, as well as for a capital reduction, a few weeks ago while regulatory approval had been secured in May.
Zain KSA said, at the time, it would lower its capital from SR14bn (US$3.7bn) to SR4.8bn (US$1.3bn) ahead of increasing it again via the rights issue. The process is aimed at eliminating some of its losses.
