May 27 2012
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Zain KSA Receives Saudi CMA Approval For SAR6 Bln Rights Issue
Sunday, May 27, 2012
DUBAI (Zawya Dow Jones)--Mobile Telecommunications Co. Saudi Arabia, or Zain KSA , said Sunday it has received regulatory approval for a 6 billion Saudi riyals ($1.6 billion) right issue, the proceeds of which will be used for debt reduction and network expansion.
The Capital Market Authority has granted its approval for the prospectus to be issued in relation to the company's proposed rights issue as part of its capital restructuring, Zain KSA said in an emailed statement.
The approval by the CMA follows the decision by the company's board of directors to seek approval for a reduction of its capital, followed by the rights issue, the statement noted.
The capital reduction will result in the company's paid-up capital being reduced to SAR4.801 billion from SAR14 billion. Zain KSA 's paid-up capital will be subsequently increased to SAR10.801 billion by way of the rights issue, the company said Sunday.
The cash proceeds will mainly be used to reduce the company's current liabilities and enhance the quality and performance of its existing network as well as to expand the company's recently launched 4G LTE hi-speed internet network and reduce bank debt, it added. "The capitalisation of a portion of the shareholder loans will further reduce the debt levels of the Company."
The capital reduction and rights issue are subject to shareholder approval and certain regulatory consents and approvals.
Zain KSA shares closed 1.1% higher at SAR9.05 Sunday.
-By Shereen El Gazzar, Dow Jones Newswires; +971 444 61684; Shereen.firstname.lastname@example.org; Twitter: @ZDJnews
Copyright (c) 2012 Dow Jones & Co.
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