Zain Saudi Arabia appoints new chairman

11 March 2014

The loss-making operator has been going through a series of management changes since the end of 2012

Zain Saudi Arabia (Zain KSA) has appointed Farhan bin Naif al-Faisal al-Jarbaa as chairman of the company, it announced following a board of directors meeting on 10 March.

Al-Jarbaa is the founder of several telecommunication companies in the kingdom and has over 34 years of experience working in the telecoms industry, according to a statement by Zain.

He will be replacing Fahad Ibrahim al-Dughaither, who resigned from the position for personal reasons. Al-Dughaither will retain a position on the firm’s board.

The move follows the appointment of Hassan Kabbani as CEO in September 2013. Zain KSA, as well as parent Zain Group in Kuwait, has been going through a series of management changes since the end of 2012 as the firm sought to turn around a loss-making year.

The heavily indebted Zain KSA has been struggling to keep up with competition from the region’s largest operator, Saudi Telecommunications Company, and Saudi’s second-largest telecoms firm, Etihad Etisalat (Mobily) since its inception in 2007. In 2013 the company reported a 6 per cent drop in net income to SR1.65bn ($440m).

But recent developments suggest the company might be able to turn around its business. In June 2013 Saudi Arabia’s Finance Ministry gave Zain KSA a lifeline when it agreed to defer SR5.6bn of licence fee payments by the operator. The deal deferred annual payments for the company’s operating licence of SR800m a year for the next seven years.

The company in August 2013 also agreed to restructure $2.3bn in debt that was originally due to be repaid in 2011. The refinancing extends the debt over an additional five years.

The refinancing was part of a wider recapitalisation plan, which included a $1.6bn rights issue in 2012.

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