Zain Saudi Sees Deal on $2.6 Billion Debt This Year

Zain Saudi (ZAINKSA), the phone operator whose quarterly loss widened, expects to sign an agreement to refinance 9.75 billion riyals ($2.6 billion) of debt in the fourth quarter after receiving additional time from lenders.

The company is in “very advanced negotiations” with a syndicate of banks as well as potential investors to refinance the Islamic murabaha facility, Zain Saudi said in a statement. The facility, which was originally due in July, was extended to Nov. 28, the second extension by lenders. The company mandated Al Rajhi Bank (RJHI), Banque Saudi Fransi (BSFR), Arab National Bank (ARNB) and Standard Chartered Plc to refinance the loan, two bankers familiar with the matter said in May.

The third-quarter loss widened to 493 million riyals from 484 million riyals a year earlier. That missed the mean estimate of seven analysts for a loss of 354 million riyals, according to data compiled by Bloomberg. The shares slumped as much as 8.2 percent to 8.35 riyals before closing at 8.7 riyals in Riyadh.

The loss was due to a re-balancing of traffic volumes from international to national locations, Zain Saudi said, adding that it had an operating loss of 305 million riyals after 222 million riyals a year earlier.

The stock has tumbled 22 percent this year compared with a gain of 5.2 percent for the Tadawul All Share Index. (SASEIDX) Six analysts recommend investors hold the shares, while four advise to sell and one says buy, according to data compiled by Bloomberg.

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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