Saudi Telecom Company (STC) and its creditors on a $1.2bn loan have agreed repayment terms that will result in lenders being repaid about 90 per cent of what they are owed, according to sources in the kingdom.

The debt was put in place in 2011 to fund STC’s acquisition of Indonesian mobile operator Axis. STC now plans to sell off Axis and use the proceeds to repay its lenders, which include the UK’s HSBC and Germany’s Deutsche Bank.

“Everyone involved has been keen to quickly find a solution and put this problem behind them,” says one banker in Riyadh.

Earlier this year lenders on the $1.2bn loan approached STC to provide additional support as Axis was underperforming. Instead, STC has decided to sell its Indonesian business.