Zain plans to raise capital by 75%
Kuwaiti telco set to increase liquidity to help fund growth strategy.
Kuwaiti network operator Zain intends to increase its capital by about 75% by selling stock to existing investors.
Zain intends to bolster its financial position to aid its acquisitive growth strategy in the next few years. The company, which announced it had acquired Iraqi telco Iraqna this week, also recently signaled that it intends to make an acquisition in Europe as early as 2008.
The firm hopes to raise $4.4 billion by selling 1.4 billion shares at $3.1 each, according to reports from Reuters.
Dr. Saad Al-Barrak, Zain's managing director and deputy chairman, said the move is intended to increase the company's liquidity, allowing it to take advantage of the "right opportunities" as they arise.
"On one hand, increasing the company's capital will provide Zain with the liquidity that is necessary to enable it to meet its commitments to its stakeholders according to our ambitious strategies," he said.
"On the other hand, this increase will play a significant role in reducing the borrowing costs of our operations in the short term and allow us to leverage for the future when the right opportunities arise."
Asaad Al-Banwan, Zain's chairman, added: "Zain has consistently gained a reputation as a frontrunner when it comes to seizing and acquiring new investment opportunities in the regional markets. Maintaining and increasing shareholders' equity remain a priority while the company continues to grow and expand."