Zain Group, which previously owned 25% of the Saudi Arabian mobile operator, subscribed to its full entitlement in the Zain KSA rights issue through the conversion of $400 million of shareholder debt and oversubscribed by $346.93 million, at the issue price of SR 10 per share. Zain Group’s post rights issue shareholding is now confirmed at 37.045%.
Zain KSA commenced operations in 2008, building on the expertise of both Zain Group and its local team. The company currently has around 7.4 million subscribers as of 30th June 2012 and a network covering 90% of the KSA population.
The rights issue was part of a wider capital restructuring process to improve the capital structure of Zain KSA, with the proceeds raised being used to invest in network capacity and services as well as to repay certain financial obligations. These improvements are designed to create the highest quality network as well as a network infrastructure for the new era of mobile usage in the Kingdom of Saudi Arabia, for the benefit of both current and future customers.
Zain KSA’s Extraordinary General Assembly Meeting had recently approved the reduction of Zain KSA’s capital from SR 14 billion to SR 4.801 billion, before increasing it by SR 6 billion through a rights issue.
“We are delighted to have participated in Zain KSA’s rights issue and to have increased our shareholding in the Company, as the Saudi market is set to play a central role in the Group’s growth plans and regional consolidation. As a leading mobile telecom operator, with a commercial presence in eight markets and a leading position in five, we recognise the significant opportunity in the Kingdom, particularly in the area of mobile broadband, and are pleased to further support the development of this business as it builds its position in this important market,” Nabeel Bin Salamah, Chief Executive Officer of Zain Group said.
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“In this vein, we will continue to ensure that Zain KSA, with its experienced management team, is able to leverage synergies from across the Group, be that in resources, shared international connectivity infrastructure, expertise and brand equity.
Zain KSA’s detailed plans for the future are founded upon the financial flexibility and investment potential that will be delivered by the successful completion on its Rights Issue. The company is already showing operational improvements and we are confident it will continue to do so.”