CMA approves Zain KSA capital restructuring

Mobile Telecommunications Company Saudi Arabia (Zain KSA), operator of one of the Kingdom's most up-to-date networks, has announced the approval of Zain KSA's proposed capital restructuring.
The approval by the Capital Market Authority (CMA) follows the decision by Zain KSA's board of directors to seek approval for a reduction of its capital followed by a SR 6.0 billion Rights Issue. The capital reduction will result in Zain KSA's paid-up capital being reduced from SR 14.0 billion to SR 4.801 billion. The Zain KSA paid-up capital will be subsequently increased.
The Rights Issue will consist of shareholders in Zain KSA subscribing for new shares in the company for cash or by capitalizing certain subordinated loans made by some of Zain KSA's founding shareholders to the company. The cash proceeds will, subject to obtaining the relevant approvals, mainly be used to reduce Zain KSA's current liabilities and enhance the quality and performance of its existing network as well as to expand the company's recently launched 4G LTE hi-speed internet network and reduce bank debt. The capitalization of a portion of the shareholder loans will further reduce the debt levels of the Zain KSA.
Prince Hussam bin Saud bin Abdul Aziz, chairman of Zain KSA, said: "This is an important step in a new era for Zain KSA. Our business is performing in line with expectations, we have a new management team, we are introducing a new strategy with demonstrable support from our largest shareholder, Mobile Telecommunications Company KSC (Zain Group), and we are now able to propose the restructuring of our capital base to our shareholders. With the support of our shareholders, we can continue to move forward with real confidence."
The capital reduction and the Rights Issue are subject to shareholder approval at an extraordinary general assembly (EGA) of the company.