Telecoms operator Zain Saudi Arabia (Zain KSA) has started a $1.6bn rights issue on 10 July as part of its capital restructuring plans that will also involve raising about $2.5bn in new bank loans.

The rights issue runs until 17 July and has to be completed for banks to agree the new loans, which will used to pay off an existing $2.7bn deal that matures on 27 July.

The rights issue and the loan refinancing, are being arranged by the local Banque Saudi Fransi and Al-Rajhi. Talks with lenders have been under way for several months to ensure that once the rights issue is complete, Zain KSA can quickly complete the deal.