Zain Saudi Arabia has started a new round of talks with the Kingdom’s Ministry of Finance to convert the debt it owes, or at least part of them, into shares.
The third telecom operator in the Kingdom may convert the entire debt or part of it into shares, it said in a bourse filing to the Tadawul stock exchange on Monday, without specifying the amount it owes to the Ministry or when it expects to finalize talks.
Zain has “started discussions to convert whole or part of the outstanding debts due to the ministry into shares in the company through partially underwriting the proposed rights issues or any other means (the Transaction),” it said in the statement.
“The transaction shall be subject to the discussion’s outcomes and shall obtain all necessary approvals from governmental and regulatory bodies such as Communication and Information Technology Commission (CITC), Capital Market Authority (CMA) and the company’s extraordinary general assembly.”
Its announcement followed a previous announcement on October 25, 2017, related to the board of directors’ recommendation to reduce the company's capital and a subsequent capital increase through a rights issue.
Considering Zain Saudi Arabia's financial performance, the company made a profit of SAR260 million ($69.3 million) in H1 2019, compared to a loss of SAR115 million ($30.6 million) during the same period in 2018.
In H1 2019, it recorded the highest revenue for the six-month period in its history, with revenues amounting to SAR4.15 billion riyals ($1.1 billion), compared to SAR3.5 billion ($933.3 million) during the same period in 2018, marking an increase of 17.5 percent due to increased demand for the company’s products and services.
In a related context, the Saudi stock market closed Monday with very positive gains, pushing again the index to exceed the levels of 8,550 points, driven by the rise of most shares of companies trading in the financial market.
Saudi Arabia's index ended its tradings with 0.5 percent up to close at 8,566 points, up 38 points, amid trades totaling about SAR3.4 billion ($906.6 million).
