-  Facility enhances operator’s plans to capture the tremendous opportunities available in the fast-growing data-driven Saudi Arabian telecom market
-  Agreement reflects a resounding vote of confidence from the Kingdom’s and international banking community of Zain KSA’s transformation and growth plan​

Mobile Telecommunications Company Saudi Arabia (Zain KSA) announces that it has successfully refinanced and extended the maturity date of its existing syndicated SAR 5.9 billion (USD 1.57 billion) Murabaha facility for five years. Additionally, the agreement includes a working capital facility of SAR 647 million (USD 172 million) for two years, bringing additional liquidity to Zain KSA to fund its digitally focused growth plans.
  
This long-term preferential extension comes after detailed and productive discussions with the regional Islamic and conventional banking community. Over the years, with the financial support of Zain Group and due to Zain KSA’s improving metrics, Zain KSA has gradually repaid SAR 3.5 billion (USD 0.9 billion) of the facility from its original 2009 borrowing of SAR 9.4 billion (USD 2.5 billion), utilizing its internal cash resources. 
 
HH Prince Naif bin Sultan bin Mohammed bin Saud Al-Kabeer, Chairman of the Board of Directors of Zain KSA commented, “The extension of the Murabaha agreement at preferential terms underscores Zain KSA’s success in adopting a policy of prudent borrowing. It also reflects an enormous vote of confidence by the Kingdom’s and international’s Islamic and conventional banking community in the company’s transformation and future growth plans. The board and management of Zain KSA are very grateful for the banking community’s commitments and efforts in reaching this successful result.” 
 
Bader Nasser Al-Kharafi, Vice-Chairman of Zain Group and Zain KSA, and Zain Group CEO said, “Despite the challenging financial environment, the successful closing of this Murabaha agreement is a testament to Zain Group’s and Zain KSA’s strong relationships with the international banking community. We are committed to playing a key role in the development of the telecom sector in the region’s largest economy and have made tremendous progress to date in our turnaround strategy.”

Al-Kharafi added, “This favorable refinanced Murabaha facility represents a critical stage in supporting the balance sheet restructuring roadmap of Zain KSA, following the recently announced capital reduction and subsequent increase through a rights issue that is planned to occur in the second half of 2018, a rights issue that will further deleverage the company. Accordingly, we are confident that we are well on track to becoming even more financially sustainable, supporting the company’s strategic roadmap, which has a target of distributing dividends to Zain KSA shareholders in the coming years.”
 
Eng. Sultan Abdulaziz Al-Deghaither, CEO elect of Zain KSA commented, “The Murabaha refinancing comes at a vital stage in Zain KSA’s development, enhancing the Company’s ability to capture the enormous business opportunities in the fast-growing data-driven Saudi telecom market. This refinancing agreement shows the confidence of the Saudi and international banks in Zain KSA’s financial strength, credit worthiness and its ability to meet its financial obligations.”
He added, “Having been granted a unified license, we are set to introduce a wider range of telecommunications services, including fixed and fiber-to-the-home services. We will also further leverage our 4G and 5G-ready network to improve the monetization of data and digital services as well as focusing on higher value postpaid and enterprise customer acquisitions.”
Furthermore, the CEO elect noted, “Zain KSA continues to contribute and benefit substantially from the Kingdom’s National Transformation Program 2020, which aims to increase the Kingdom’s internet usage to 85% (up from current levels of approximately 65%) and the company is working with relevant authorities to implement initiatives that will contribute to achieving the objectives of the Kingdom’s Vision 2030.”
Eng. Al-Deghaither concluded, “Once the financial restructuring is completed, Zain KSA will be extremely well positioned, with strong liquidity and a long-term debt profile, to take full advantage of the tremendous growth opportunities available in the Saudi telecom market. Moreover, the financial restructuring is expected to improve the financial performance, profitability and leverage ratios of the Company.”
 
The Global Coordinators and Bookrunners of the Murabaha facility are Al Rajhi Bank (ARB), Banque Saudi Fransi (BSF), Arab National Bank (ANB) and Credit Agricole CIB (CACIB). The lenders for this facility are Al Rajhi Bank (ARB), Banque Saudi Fransi (BSF), Arab National Bank (ANB), National Bank of Kuwait (NBK), Credit Agricole CIB (CACIB), Gulf Bank, Ahli Bank of Kuwait (ABK), and Boubyan Bank. The legal advisors of the transaction are Clifford Chance acting for Zain KSA and Zain Group, with Latham & Watkins acting for the lenders.

Key operational and sector highlights related to Zain KSA include:
• Zain KSA was the only operator in the Kingdom to witness revenue growth (up 5.5%) during 2017.  
• Zain KSA’s turnaround efforts have resulted in a 40% improvement in the company’s EBITDA year-on-year, reflecting the success of the management’s new business growth strategy and data monetization initiatives, as well as its parallel cost optimization and operational efficiency program.
• These efforts have also seen Zain KSA record its first ever profit in 2017 as the operator recorded an approximate SAR 1 billion (USD 265 million) turnaround in net profit from losses recorded a year earlier, with cash reserves accumulated as at 30 March 2018 exceeding SAR 1 billion.
• The quality and competitiveness of Zain KSA’s network has been enhanced with over SAR 5.1 billion investment in 4.5G advanced mobile network technology over the past three years, in addition to the June 2017 acquisition of 2x10 MHz of 1800MHz spectrum and 2x10 MHz of 800 MHZ spectrum in February 2018. 
• These technology developments, in addition to holding other frequencies including 900MHz and 2100MHz, results in Zain KSA’s spectrum portfolio having a significant positive impact on supporting the ever-increasing data needs of consumer and business customers and raising the quality of services and mobile experience. The company’s state-of-the-art 2G, 3G and 4G network covers 97% of the Kingdom’s populated areas.