Saudi Arabian mobile-phone operator Etihad Etisalat Co. started talks with lenders about refinancing 8 billion riyals ($2.1 billion) of debt to get better terms, according to people with knowledge of the matter.
Mobily, as the company is known, began discussions with banks after putting the sale of its mobile towers on hold, some of the proceeds of which would have been used to repay the debt, the people said, asking not to be identified as the information is private. The company, which is being advised by boutique investment bank Verus Partners, wants to lower interest costs and extend the length of the debt, the people said.
Mobily discovered accounting errors in 2014 that led to more than 1 billion riyals of losses, caused it to breach a covenant on its debt and prompted the removal of its chairman and chief executive officer. Last month, the company abandoned plans to sell its wireless network towers, which could have raised as much as $2 billion, after rival Saudi Telecom Co. said it was also considering a similar sale, people familiar said.
U.K.-based Verus Partners, which also advised Saudi Arabia’s government on a $10 billion loan earlier this year, declined to comment. Mobily also declined to comment.