Kuwait’s Zain in March agreed to sell its holding in the affiliate to joint bidders Batelco and Kingdom Holding for $950 million, with due diligence announced in June.

“The deal is progressing well and there are no show-stopping issues — we are addressing minor issues when they come up,” Batelco Chief Executive Peter Kaliaropoulos said in a telephone interview.

“We expect it to be completed in eight weeks... but whether it’s eight weeks, 10 weeks or seven weeks isn’t critical. What’s critical is making sure the company has the right working capital going forward.”

Zain Saudi is expected to make a loss of SR487.73 million ($130 million) in the second-quarter, according to the average estimate of analysts polled by Reuters.

This would take the carrier’s accumulated losses to more than SR8.8 billion, while its share capital totals 14 billion.

Under Saudi market rules, a company’s shares will be suspended if accumulated losses reach 75 percent.

To remedy this, Zain Saudi’s board in February recommended cutting the company’s share capital by more than half to 626.5 million shares with a nominal value of SR10. This move would absorb most of the firm’s losses and it plans to then issue 438 million new shares.

“Right now, Zain Saudi is still at least two years away from profitability and new management must try to shorten that time frame as well as trying to keep with up capital expenditure requirements to compete with the other operators,” said Asim Bukhtiar, Riyad Capital head of research in Riyadh.

“They will have to inject more funding into the company.”

Zain Saudi, which launched services in 2008, has struggled with debts after it paid $6.1 billion for Saudi Arabia’s third mobile license. Its market share fell to 16 percent in 2010, down from 18 percent a year earlier to leave it a distant third to Saudi Telecom and Etihad Etisalat (Mobily), an affiliate of the UAE’s Etisalat.

Zain Saudi owes shareholders SR3.8 billion in advances and fees and in April agreed a $600 million two-year refinancing deal, while it also has a 9.75 billion murabaha facility maturing in August that can be rolled over for a further 12 months.