Saudi telecoms firm asks bank for more time to arrange a new $2.6bn loan
Zain Saudi Arabia (Zain KSA) has written to its banks seeking a two-month extension on repayment of a $2.6bn loan that matures on 27 November, the fourth time that the telecoms firm has had to ask banks for more time while it tries to arrange a new loan.
Sources close to the company say that the latest extension request has come as a result of the company revising its business plan in the wake of Fraser Curley taking over as chief executive in March and a $1.6bn rights issue being completed during the summer. The rights issue had to be finalised before banks would agree to the new loan.
One source in Riyadh says that the new business plan includes far more conservative growth forecasts than the version originally given to lenders earlier in the year when the company began seeking interest in a new $2.6bn loan. Proceeds from this deal will repay the existing facility.
The loan was originally due to mature in February, but banks gave the company an extension after the potential acquisition of the firm by a consortium of the local Kingdom Holding and Bahrain’s Batelco collapsed in October 2011.
Once that deal fell through, the loss-making company began working on a turnaround plan to restore its finances and double market share. The local Banque Saudi Fransi and Al-Rajhi are acting as advisers to Zain KSA.
Bankers close to the company say the new $2.6bn loan is already oversubscribed and includes several banks that are in the existing facility.