RIYADH: Telecoms operator Zain Saudi said its net loss widened by two percent in the third quarter, attributing the deterioration to lower revenue caused by price regulation on international calls.
Saudi Arabia’s No.3 mobile company, an affiliate of Kuwait’s Zain, made a net loss of SR493m in the three months to September 30, compared with a loss of SR484m in the year-earlier period.
The company — which also said it was in advanced talks to refinance a loan worth SR9bn ($2.4bn) — said it had suffered from regulations on international call prices.
A price war last year had boosted Zain’s market share and international calls had been a growth area in the third quarter of 2011 for the company, which has struggled under mounting losses and multi-billion dollar debts.
The operator’s share of the kingdom’s mobile subscribers fell four percentage points to 12 percent in 2011, according to Zain’s annual report, leaving it a distant third to Saudi Telecom Co and Etihad Etisalat (Mobily).
Zain said in its bourse statement its liabilities exceeded its current assets.
“The company believes that it will be successful in meeting its obligations in the normal course of operations and in its efforts to secure the necessary funding,” it added.
In September the company extended the maturity of a SR9.75bn facility by two months to allow for refinancing talks to take place, having already received one extension.
It added it repaid SR750m of the facility in August, leaving SR9bn to be addressed.
In Tuesday’s statement, Zain Saudi said it was in “very advanced negotiations” with a syndicate of banks to refinance the loan, with signing “most likely” in the fourth quarter.
Parent firm Zain increased its stake in Zain Saudi to 37 percent from 25 percent after underwriting a capital restructuring by its affiliate. Zain Saudi shares were trading down 3.9 percent at 0820 GMT after dropping as much as 5 percent in early trade.
Reuters
