Saudi Arabia’s Etihad-Etisalat (Mobily) has begun seeking a financial adviser for a refinancing plan that could see the firm raising more than SR10bn ($2.7bn) by the end of the first half of the year.

The company issued a request for proposals (RFP) to Saudi banks at the beginning of the year and has given them until 15 January to submit their bids to advise on the company’s finances. An appointment is expected by the end of the month.

According to the RFP, Mobily plans to complete its refinancing by 30 June. The early refinancing of existing debt will also be used to raise capital for the development of its broadband operations in Saudi Arabia.

Bankers close to the company say that Mobily has asked them to look at using both Islamic bank debt and sukuk (Islamic bonds) as part of the new funding put in place. The mandate will also include advising on the development of a new capital structure for the firm to fit its spending requirements.

Nafez Alabbas, analyst at Ajeej Capital in Riyadh, says Mobily needs to spend at least SR3bn a year on its network to keep up with demand for its services. The development of additional services would require further expenditure.

“Everything is on the table. They want to put the financing in place to move from a start-up company to an established long term player,” says a banker pitching to advise Mobily says of the refinancing plan.

Mobily was launched in May 2005, and has since managed to build up a market share of around 40 per cent. The company has identified broadband as a key growth area for its current five year development strategy.

Mobily raised $320m from a group of local banks in December 2010 (MEED 24:12:10). The deal was priced at just 65 basis points above the Saudi interbank offered rate, and was seen as a deal for relationship banks to position themselves for the upcoming financial adviser role.

The December deal was provided by Banque Saudi Fransi, which is also acting as documentation bank, Samba, National Commercial Bank, Sabb and Riyad Bank.