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23-06-10

Zain Saudi considers capital reduction

(MENAFN) A statement issued by Zain Saudi Arabia said that the firm is considering a capital cut to cover some or all of its accumulated losses which reached $1.6 billion by end-March, Reuters reported. The board of directors discussed the proposed restructuring of the companyÂ's capital through slashing the companyÂ's capital to cover all or some of the firmÂ's accumulated losses, for this to be followed by a capital increase, the statement said. KuwaitÂ's Zain owns a 25 percent stake in Zain Saudi Arabia. Detailed proposals for the capital restructuring plan will be submitted to Zain SaudiÂ's board before end-July, according to the statement. Zain Saudi paid $6 billion for its license and has borrowed heavily to fend off cash-rich rivals Â- state-owned Saudi Telecom Company and Mobily, affiliated to Emirates Telecommunications. However, the firm narrowed its net loss in the first quarter to $176.8 million and assured investors it was able to meet its obligations. Chief Executive, Saad Al Barrak, said earlier that the firm would finalize a capital increase plan this month. In February, Barrak said the firm will seek a 30 percent capital increase this year, half of which would be through converting debt worth $577m into equity and the other half from founding shareholders.

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