Zain reaffirms its sound financial position

Zain Saudi Arabia confirmed today that it had obtained waivers from the lenders of the Murabaha Islamic facility which the company had signed in August 2009, pointing out that the waivers are related to updated operational milestones for the fiscal year ended December 31, 2009.  The company also stated that in addition it has agreed with the banks to provide them with updated quarterly milestones for year-end 2010.

 

The company went on to stress that it has maintained the timely payments of the installments owed to the lending banks indicating that the company continues to meet its financial obligations in accordance with all agreed upon financial obligations and timelines.  The waivers were requested for a shortfall on two operational performance indicators.

 

Zain Saudi Arabia CEO, Dr. Saad Al Barrak said, "Zain elicits great confidence in the banking sector and among lenders. This confidence was certainly one of the factors behind the successful results posted by the company.  During its first full operational year in the Kingdom, Zain set for itself a very ambitious plan.  This plan included achieving certain key targets faster than it had expressed in the original case envisioned at the time of the Initial Public Offering.  The debt and capital markets were significantly different then as well."

 

Al Barrak went on to reiterate that Zain has fully met all of its financial obligations, but it needed to be exempted from some of the covenants that had been agreed upon with the debtors, including - for example - the covenant regarding the revenue target, where actual results came in below the target by less than 3.8%.  Zain Saudi Arabia adheres to the highest principles of disclosure and transparency and its financial statements are fully compliant with International Financial Reporting Standards (IFRS). 

 

"The past year was the first full year of the company's operations in the Kingdom. This stage required an extensive effort to get the targeted customers while we built and rolled out our network and systems in order to increase our coverage and maintain our service quality.  Zain Saudi management has always set very ambitious plans and targets in recognition of the Kingdom’s potential” Al Barrak added.

 

Pointing out that the number of Zain customers in Saudi Arabia has surpassed 6 million, Al Barrak said the company managed within less than 16 months to build a solid market position through its dedication and efficiency, as it has successfully captured a market share of over 18% from the total mobile subscribers in the Kingdom. 

 

Al Barrak explained that these indicators have exceeded original analyst expectations, stressing that these impressive results have been achieved primarily due to the confidence placed in Zain by its customers.