Zain misses loan commitments

25 Jan 2010

According to a report by Reuters, Zain Saudi Arabia has revealed that it has entered into negotiations with creditors after missing some of its commitments on a two-year USD2.5 billion Islamic loan. Saad al-Barrak, Zain’s chief executive, told Al Arabiya television that the commitments in question were related to performance ratios the company was supposed to deliver to banks and not debt repayment, adding: ‘Zain has not defaulted on any payment of debt, not even on payment of interest.’ To put investors’ minds at ease the firm released a statement to the Saudi bourse claiming that its creditors had pardoned it under the condition they agree to a financial plan for 2010. The statement said: ‘The firm is in contact with creditors to provide them with information based on the company’s current financial forecasts to ensure that it honours its commitments for the quarterly periods (2010).’ Zain Saudi Arabia is 25% owned by Kuwait’s Zain Group. As reported by CommsUpdate on 20 January 2010, Zain Saudi Arabia announced a net loss of SAR657 million (USD175.15 million) for the three months ended 31 December 2009, as losses contracted by over 29% year-on-year.

Saudi Arabia, Zain Saudi Arabia