Zain KSA refinances its SAR 5.9 billion existing Murabaha facility

The facility will be refinanced for five years at preferential terms, with an additional working capital facility of SAR 647 million for two years
ZAin has refinanced its SAR 5.9 billion Murabaha facility.
ZAin has refinanced its SAR 5.9 billion Murabaha facility.


Mobile Telecommunications Company Saudi Arabia (Zain KSA) has refinanced and extended the maturity date of its existing syndicated SAR 5.9 billion ($1.57 billion) Murabaha facility for five years. Additionally, the agreement includes a working capital facility of SAR 647 million ($172 million) for two years, bringing more liquidity to Zain KSA to fund its digitally focused growth plans.

“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,” said HH Prince Naif bin Sultan bin Mohammed bin Saud Al-Kabeer, Chairman of the Board of Directors of Zain KSA.

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 ($0.9 billion) of the facility from its original 2009 borrowing of SAR 9.4 billion ($2.5 billion), utilising its internal cash resources.

“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,” said Bader Nasser Al-Kharafi, Vice-Chairman of Zain Group and Zain KSA, and Zain Group CEO. “This favourable 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.”

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.

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