Saudi Arabia’s indebted telecom operator Zain Saudi has signed an agreement with the Saudi Ministry of Finance to defer the payment of licence-related levies, estimated at SAR56 billion (USD1.49 billion) over a seven-year period, according to an announcement posted on Saudi Stock Exchange. The arrangement was signed by Minister of Finance Ibrahim bin Abdulaziz Al-Assaf and Zain Saudi’s recently appointed Chairman of the Board of Directors Fahd Bin Ibrahim al-Dughaither, and will be treated as a commercial loan, with the first instalment due on 1 June 2021. Mr Fahd Bin Ibrahim al-Dughaither said in an interview with Al Arabiya that the SAR800 million was calculated as an average of what the company is estimated to be earning at present and the expected increase in revenues over the deferment period, and will be used to pay down debt and develop the company’s operations, Arab Times posted.
According to TeleGeography’s GlobalComms Database, Zain Saudi Arabia had liabilities of SAR19.5 billion at the end of 2012, and has struggled to compete against rivals Saudi Telecom Company and Mobily, an affiliate of the UAE’s Etisalat, ever since it paid USD6.1 billion for the third mobile licence in the country in August 2008. The company, an affiliate of Kuwait’s Zain Group, has extended a SAR9 billion (USD2.4 billion) Islamic loan which was originally due to be repaid in 2011, but which has been reimbursed numerous times. In addition, Zain has secured a further period to allow for a separate USD600 million loan that was due to be settled in May 2013. According to the stock market statement released by the company, the new dilation will be used to acquire fresh loans with five year repayment period.