Thursday, Mar 22, 2012
(This story was originally published Wednesday.)
RIYADH (Zawya Dow Jones)--Saudi Arabia's state pension agency has sold its entire 5% stake in Mobile Telecommunications Co. Saudi Arabia, better known as Zain KSA (7030.SA), as the telecoms company struggles to complete a much needed restructuring, people familiar with the matter said Wednesday.
The Public Pension Agency disposed of its Zain holding over the course of this week, said one person close to Zain, who asked not to be named. A spokesman for the Pension Agency wasn't immediately available for comment.
According to data published on the Saudi Stock Exchange website, the Public Pension Agency no longer features as a company that holds 5% or more of Zain KSA shares.
Farouk Miah, an analyst with NCB Capital, called the pension agency's selling of Zain "significant" and "concerning," especially as the government agency is traditionally a passive shareholder.
NCB's Miah downgraded its recommendation on Zain KSA to underweight, from neutral, saying with ongoing management change and high competition, financial progress in the short run will be difficult.
"The successful completion of its proposed balance sheet restructuring is vital in building an investment case for Zain," he added.
Zain Saudi Arabia became the country's third mobile operator when Kuwait-based Mobile Telecommunications Company (ZAIN.KW) won the bid for the company's license in March 2007, paying for SAR23 billion ($6.3 billion).
The company is currently aiming to finish a new capital reorganization plan in May, although executives have steadily pushed back that target, NCB's Miah noted. A six-month extension on a SAR9.75 billion syndicated murabaha financing expires in July.
Zain KSA also has also switched chief executives three times in the last six months, with former German telecoms executive Fraser Curley named the latest chief executive earlier this month.
Zain shares fell sharply again Wednesday, last trading down 3.4% at SAR10.10, after slumping 9.6% Tuesday.
By Ellen Knickmeyer, Dow Jones Newswires, +966 1 279 5252, ellen.knickmeyer@dowjones.com
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
22-03-12 0347GMT
