Zain Saudi Arabia announces plans for capital restructuring

Zain Saudi Arabia’s chairman, Hussam bin Saud bin Abdul Aziz has announced that the board has agreed to the cellco undergoing a reduction of its capital followed by a SAR6 billion (US$1.6 billion) rights issue, subject to the consent of the Capital Market Authority, the ministry of Industry and Commerce and the approval of other relevant parties.

The capital reduction will result in the company’s paid-up capital being reduced from SAR14 billion to SAR 4.8 billion. The paid-up capital will be subsequently increased to SAR 10.801 billion by way of the rights issue.

The rights issue will consist of raising fresh equity and the capitalisation of subordinated shareholder loans to the company. The fresh equity will, subject to obtaining the relevant approvals, be used to reduce bank debt, enhance the quality and performance of the existing network as well as to expand the company’s recently launched 4G LTE network. The fresh equity will also be used to fund the future growth of the company, while the capitalisation of the shareholder loans will further reduce the debt levels of the company.

The capital reduction and the rights issue will be subject to shareholder approval at respective extraordinary general assemblies of the company, to be held after all relevant consents and approvals have been obtained.