Saturday, Dec 01, 2012
(This story was originally published on Thursday.)
DUBAI (Zawya Dow Jones)--Mobile Telecommunications Co. Saudi Arabia (7030.SA), better known as Zain KSA, has received another extension on a SAR9 billion ($2.4 billion) Islamic debt facility, as the loss making telco continues to look for ways to lighten its debt burden.
The payment delay comes after Zain KSA prepaid SAR750 million on Aug. 27, the telco said in a statement late Wednesday. The new facility will now mature on Dec. 19 and could be extended even further, it added.
"This extension will allow Zain KSA and its banks additional time to finalise the implementation of an optimal, long-term financing agreement to replace the existing one," Zain said.
The under fire telco hopes the extension will give it more time to improve its financial health and allow Zain KSA more flexibility in its investment in network improvements.
Zain KSA became the country's third mobile operator when Kuwait-based Mobile Telecommunications Co. (ZAIN.KW), or Zain Group, won the bid for the company's license in March 2007, paying SAR23 billion. But the telco has since struggled to grow profits due to the hefty costs associated with the roll out of its mobile telephone infrastructure and intense competition from the likes of Etihad Etisalat, or Mobily, and Saudi Telecom.
Last month, Zain KSA said its third-quarter net loss widened to SAR493 million Saudi riyals ($131.5 million) compared to SAR484 million in the year-earlier period.
In July, Zain Group was forced to lift its holding in Zain KSA to 37%, less than a year after trying to dispose of its entire 25% stake, after taking up some of the slack from the Saudi telco's rights issue and capital restructuring.
Zain KSA shares closed unchanged at SAR7.60 on Wednesday.
Write to Iman Dawoud at iman.dawoud@dowjones.com
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
01-12-12 0705GMT
