Mobile Telecommunication Company Saudi Arabia (Zain KSA) Announces refinancing Murabaha facility offered by Al Rajhi Banking and Investment Corporation, Banque Saudi Fransi, Arab National Bank, National Bank of Kuwait, SAMBA Financial Group, Bank AlJazira, Gulf International Bank, Credit Agricole CIB
Tuesday 29 September 2020| ELEMENT LIST | EXPLANATION |
| Introduction | On 27 September 2020, Mobile Telecommunications Company Saudi Arabia (Zain KSA) successfully refinanced and extended the maturity date of its existing five years syndicated Murabaha facility of an outstanding amount of SAR 3.85 Billion at 30th of September (originally SAR 5.9 Billion, and maturing in 2023), until 2025 for a total amount available up to SAR 6 Billion with two years grace period, at better commercial terms. Moreover, the agreement includes a working capital facility of SAR One Billion (originally SAR 647 million in 2018) until 2025, bringing additional liquidity for Zain KSA to fund its business growth plans. Therefore, on 30/9/2020, the company will drawdown only the outstanding amount of the existing agreement (SAR 3.85 Billion) and will withdraw the remaining amount as per the company business requirements (including the repayment of the installments toward the Ministry of Finance debt starting from 2021). |
| Date of Signing the Credit Facility Rescheduling | 2020-09-27 Corresponding to 1442-02-10 |
| Financier | Al Rajhi Banking and Investment Corporation, Arab National Bank, Banque Saudi Fransi, National Bank of Kuwait, SAMBA Financial Group, Bank AlJazira, Gulf International Bank, Credit Agricole CIB |
| Reasons for rescheduling | To get better commercial terms. |
| Credit facility Amount and Rescheduled Amount | Original amount in 2018 : SAR 5.9 Billion Refinancing amount : SAR 3.85 Billion New Murabaha facility amount: SAR 6 Billion. the company will drawdown only the outstanding amount of the existing agreement (SAR 3.85 Billion) and will withdraw the remaining amount as per the company business requirements (including the repayment of the installments toward the Ministry of Finance debt starting from 2021). |
| Financing Duration, before and after Rescheduling | The maturity date of the existing Murabaha financing is in 2023. The maturity date of the new Murabaha financing is in 2025, with a grace period from the repayment of the principal is two years from the date of refinancing. |
| Guarantees Provided for the Rescheduled Credit Facility | This facility is secured partially by a guarantee from Mobile Telecommunications Company K.S.C.P, a pledge of shares by some of the founding shareholders and assignment of certain contracts and receivables. |
| Related Parties | Mobile Telecommunications Company K.S.C.P |
| Additional Information | This long-term preferential extension came after detailed and productive discussions with the Saudi, regional and international Islamic and conventional banking community. This refinancing shows the confidence of the Saudi and international banks in Zain financial strength, credit worthiness and its ability to meet its financial obligations. This favorable refinanced Murabaha facility is expected to reduce the cost of the debt, improve the financial performance, and the profitability of the company. |