We would like to invite you to continue a survey you have started. ...

Do you trust your insurer ?

Strongly agree
Strongly disagree
Insurance provides peace of mind
Insurance is purchased only when compulsory
Terms and Conditions (small print) are clear and easily accessible
Insurance jargon (language) stands in the way of fully understanding each policy
Insurance companies try their best to uphold the details of the policy without cutting corners
Reducing risk, cutting costs and profits are more important to an insurance company than the customer
Insurance companies in the region are as professional as in other more developed markets
Age group
Do you feel your insurance provider works in your interest?
Have you had a rejected claim that you feel was not justified?
Do you trust your insurance provider?
Our Network

Register for our free newsletter

Latest News

Five banks to underwrite $1.6 billion Zain Saudi share issue

Saudi Zain Telecom

Lead manager Saudi Fransi Capital, the investment banking unit of Banque Saudi Fransi, and Rajhi Capital, part of Al-Rajhi Bank, will each underwrite 44.8 percent of the issue's 600 million shares.


June 6, 2012 11:47 by

Saudi Arabia’s Al-Rajhi Bank and Banque Saudi Fransi are among five banks underwriting a 6 billion riyals ($1.6 billion) rights issue from indebted telecoms operator Zain Saudi, according to the issue prospectus.

Lead manager Saudi Fransi Capital, the investment banking unit of Banque Saudi Fransi, and Rajhi Capital, part of Al-Rajhi Bank, will each underwrite 44.8 percent of the issue’s 600 million shares.

Albilad Investment will cover 3.81 percent, while units of Alinma Bank and Saudi Hollandi Bank will each underwrite 3.33 percent.

Under Saudi stock market rules, all share offerings must be underwritten.

Zain Saudi in May received regulatory approval to cut its share capital to 4.8 billion riyals from 14 billion, with the move aimed at eliminating some of its accumulated losses which stood at 10.1 billion riyals at the end of the first quarter.

Once this is completed, the operator – an affiliate of Kuwait’s Zain – will launch the rights issue, with the proceeds largely used to clear some of its debts.

Zain Saudi had liabilities of 22.9 billion riyals as of March 31. These include 4.1 billion riyals borrowed from shareholders, some of which will be converted into new shares as part of the rights issue.

The offering still requires the approval of Zain Saudi shareholders at a meeting scheduled for June 25. A date for the offering will be set once this assent is granted. Shares will likely be sold at par value, which is 10 riyals each.

The company will allocate 1.15 billion riyals of the proceeds to expand its network coverage and improve services, according to the prospectus.

Zain Saudi’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).

In the prospectus, Zain Saudi warns intense competition may hurt its attempts to win back customers as well as impacting marketing costs and call tariffs.

These difficulties will affect the bottom line, Zain Saudi warned. The company has yet to make a quarterly net profit nearly four years after launching services and does not expect to pay an annual dividend before 2015, the prospectus added.

($1 = 3.7505 Saudi riyals)

(Writing by Matt Smith; Editing by David French)


Tags: , , , ,

Leave a Comment