Zain Saudi will have to go ahead with a multibillion dollar capital restructuring in light of the failed US$950mn stake sale after Baletco and Kingdom Holding withdrew their joint bid.
Slashing capital
Zain Saudi must cut its capital to comply with Saudi Arabia bourse rules, having racked up about US$2.3 billion in accumulated losses. Its debts top US$5.5 billion and it has yet to make a quarterly profit.
"We expect (to) achieve high growth levels and turn into profit as soon as the period for capital restructuring is completed, which we expect to speed up after the failure of the deal to sell Zain Kuwait's share," Zain Saudi chairman Prince Hussam bin Saud wrote in a response to Reuters.
Zain Saudi's board had proposed to restructure its capital in August 2010 and in February said it would ask shareholders to approve slashing its capital by 55 per cent to US$1.68 billion.
