Zain Saudi raises $ 1.6 billion in Islamic loan

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DUBAI (Reuters) – Saudi Arabia’s mobile telecommunications company (Zain KSA) has raised a 6 billion riyal ($ 1.60 billion) loan to refinance existing debt and ensure access to additional liquidity for support growth, she said in a stock exchange filing.

The Islamic loan, with a murabaha structure, refinances until 2025 an existing debt facility with an outstanding amount of 3.85 billion riyals.

The new debt package has a two-year grace period and better business terms, said the company, which is 37% owned by Kuwaiti group Zain.

On September 30, “the company will only withdraw the outstanding amount from the existing agreement (3.85 billion riyals) and withdraw the remaining amount in accordance with the company’s business requirements,” he said.

The financing of the Murabaha is a cost-plus-benefit arrangement that conforms to the standards of Islamic finance.

“This favorable refinanced facility from Murabaha is expected to reduce the cost of debt, improve the financial performance and profitability of the company,” said Zain KSA.

Refinancing was provided by a group of banks including Al Rajhi Banking and Investment Corporation 1120.SE, Bank Saudi Fransi 1050.SE, Arab National Bank 1080.SE, National Bank of Kuwait NBKK.KW, SAMBA Financial Group 1090.SE, Bank AlJazeera 1020.SE, Gulf International Bank and Crédit Agricole CIB CAGR.PA.

Reporting by Davide Barbuscia; Editing by Kim Coghill

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