Zain KSA in talks with lenders

Failure to meet the loan commitments was related to performance ratios, according to Zain chief.

Tags: Saudi ArabiaZain - Saudi Arabia
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Zain KSA in talks with lenders Earning ratios led to problems with lenders, according Zain's CEO. (Getty Images)
By Staff Writer Published  January 24, 2010

Zain Saudi Arabia, KSA's third mobile operator after STC and Mobily, has entered talks with some of its lenders after it failed to meet obligations on a two-year $2.5 billion loan last year, according to a report from Reuters.

Zain's CEO, Saad Al Barrak, later said on Al Arabiya television that the failure to meet the loan commitments was related to performance ratios the company was supposed to deliver to banks, rather than debt repayments, the report added.

"The company is in contact with creditors to provide them with this information based on the company's current financial forecasts to ensure that it honours these commitments for the quarterly periods (2010)," the company said in a statement posted on the Saudi bourse.

News of the debt problems came shortly after the company announced a net loss of SAR657 million ($175 million) for the fourth quarter of 2009. However, the company's operating losses also declined 44.3% to SAR436 million ($116 million) during the fourth quarter.

In August 2009, Zain Saudi Arabia sealed a $2.5 billion Murabaha financing facility to repay its existing Murabaha and fund network expansion.

The company, which is 25% owned by Kuwait's Zain, became the third mobile phone operator to be licensed in KSA after paying $6.1 billion for the licence in 2007.

3035 days ago
Atif Naveed

Zain KSA, or any other compnay which follows the same attitude in operations (ALl family company), will automatically wash out from the surface of the Telecom market, soon or later. Zain Management must think about, and study what is wrong in Zain and what is good in Mobily... the difference is clear, the proper professional team (mostly Paki) gives the out put which (family members can't) . I am not in total favor of Paki team, but atleast the right professional shoudl be their, as Paki guys have good handson experience. Inteligent and hardworkers. try to add some feel the difefrence. Plz no more (brothers & Brothers friends)

3068 days ago

I think until the there is a change in the top management of Zain KSA, the company will keep having a low performance. And moreover, the financial books of Zain KSA are not stating the truth of the actual low performance of Zain KSA. Starting the launching phase with a system of number reservation that went down. Having a branding agency who is not solid in understanding the Saudi dynamic. The change of head of marketing of 4 times in less than 2 years time…etc and many other internal issues on making decision to move the company to the positive side. Customers has been complaining a lot on the performance of the services and the level of QoS which is far below STC and Mobily. Moreover, Zain KSA has been promising the market with options such as Add-on services, top broadband services [but nothing yet delivered] as they only have similar USBs as Mobily and other operators. Selling nice numbers and copying reduction of prices are very old games in the mobile sector and as once some one in Zain said [Copying is the culture of Monkey’s] today Zain KSA is highly demonstrating that they are still in the Monkey business with no idea on how to provide new QoS, services and innovative ideas and retailing outlets to demonstrate the reason why 3rd operator in KSA market is there.

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