Zain Saudi Arabia’s chief executive officer denied that the company has come under “funding pressure” in an interview on Arabic-language television on 21 April.
Saad al-Barrak said that the company was considering several options to increase its capital…
Zain Saudi Arabia’s chief executive officer denied that the company has come under “funding pressure” in an interview on Arabic-language television on 21 April.
Saad al-Barrak said that the company was considering several options to increase its capital as a way of making its massive debt burden more manageable.
Al-Barrak spoke on the same day that Zain Saudi Arabia revealed a SR663m (US$177m) loss for the first three months of this year.
The company has struggled to overcome huge start-up costs since it started to sell mobile phones in August 2008. In particular, it has struggled with the US$6bn cost of its licence to operate a mobile phone service in the kingdom.
Zain Saudi Arabia’s parent company, the Kuwaiti telco Zain, made the bid at the top of the bull market in the Middle East.
Al-Barrak said that he would increase the company’s capital, but that he had not decided how to do so.
“Our choice is clear to resort to a capital hike. It is normal as companies in the beginning do not need a big capital, but depend on loans. We did not reach a final decision as to how to increase capital, which mechanism to implement, and whether to get the stock market’s permission,” he said.
In February, Al-Barrak announced that he was considering converting US$577m of debt to equity before the end of 2010.
