Atheeb mulls rights issue to cut losses
Struggling WiMAX player assesses its options as debt burden grows.
Atheeb Telecom, a fixed-line voice and data operator in Saudi Arabia, plans to seek shareholder approval for a SR600 million ($160 million) rights issue after racking up losses amounting to 75% of its capital, or about SR750 million ($200 million).
During the nine-month period to 31 December 2010, Atheeb Telecom, which offer fixed voice and data services via its WiMAX network, made a net loss of SR453 million, according to a posting on the Saudi bourse website.
Speaking on Al Arabiya television, Prince Abdul-Aziz bin Ahmed al Saud, Atheeb Telecom's chairman, said that the company had "several options" to curtail its losses, and added that the company needed to set a shareholder meeting.
The company's financial problems drew attention in June last year, when former CEO Ahmad Abbas Sindi resigned following poor financial results, with the firm accumulating losses of almost 40% of its capital.
Atheeb Telecom is backed by Saudi Arabia's Atheeb Group and Bahrain's Batelco, which has a 15% stake in the company. The remaining 35% of the company was divided between an IPO and a Saudi retirement fund before the company launched.