Zain Saudi has extended its SAR9bn (US$2.4bn) loan for the sixth time, as the loss-making telco attempts to arrange a new financing facility.
In an announcement to the Saudi stock exchange, the Saudi arm of the Kuwaiti telco group said that the…
Zain Saudi has extended its SAR9bn (US$2.4bn) loan for the sixth time, as the loss-making telco attempts to arrange a new financing facility.
In an announcement to the Saudi stock exchange, the Saudi arm of the Kuwaiti telco group said that the syndicate of lenders of the Murabaha facility had agreed to extend the loan to 30 January 2013.
“The company intends to use the extension period to continue discussions towards the finalization of a new long-term financing arrangement to replace the Murabaha facility,” said the announcement. “Subject to the further consent of the lenders of the Murabaha facility, the maturity date may be further extended to a date after 30 January 2013.”
Zain Saudi made losses of US$348.4m in the first 9 months of 2012. Speaking to TelecomFinance an analyst criticised Zain Saudi’s operational performance, saying it had “not been solid”. He added the company had “far from sufficient funds to pay back the loan”.
“The business does not look very sustainable without a fresh infusion of capital; as a lender I would be worried. They may charge higher interest or demand more guarantees from the parent company,” he said.
