CMA approves Zain Saudi’s capital cut

28 Jan 2015

Zain Saudi Arabia, a subsidiary of Kuwaiti-based Zain Group, has secured regulatory approval from the Capital Market Authority (CMA) for a 45.96% reduction in the company’s capital from SAR10.801 billion (USD2.88 billion) to SAR5.837 billion, with the total number of its shares nearly halved to 583.729 million. The principal reason for the capital reduction – which will involve cancelling one Zain Saudi share for every 2.18 shares prior to the exercise – is to write-off all of the company’s accumulated losses up to 30 September 2014. However, the capital cut is still subject to shareholder approval.

TeleGeography notes that the operator previously reduced its capital by 65%, to SAR4.8 billion, in 2012 to alleviate its mounting losses, with each share carrying a par value of SAR10. Zain Saudi subsequently launched a SAR6 billion rights issue, which saw Zain Group increase its holding in the Saudi telco from 25% to 37% following a relatively weak response from other shareholders.

Saudi Arabia, Zain Group, Zain Saudi Arabia