$2.5bn deal to fuel Zain growth

Saudi Arabia: Zain (KSA) announced last week the closing of a $2.5 billion Murabaha financing facility.
“The funds will be used to repay its existing Murabaha, facilitating the mobile telecom operation’s ongoing network expansion and future growth,” Zain said in a statement issued from its Manama headquarters.
The term of the facility is two years with options of extending for a further twelve months. Al-Rajhi Capital, Banque Saudi Fransi and Calyon acted as financial advisers, with a total of eight regional and international financial institutions participating in what is one of the largest Islamic financings this year.
“This is an enormous vote of confidence by the International financial community in Zain KSA’s performance to date and its future expansion plans in the region’s largest economy,” said Saad Al-Barrak, CEO of Zain Saudi Arabia and Zain Group. “The growth and success of this mobile operation is critical to Zain Group’s 2011 ambition of being a top ten global mobile telecommunications company. The Murabaha facility, which comes at a vital stage of Zain KSA’s business growth cycle, will play an important role in achieving this goal.”
In less than 12 months, and despite the very competitive nature of the mobile telecom market in the Kingdom, Zain Saudi Arabia has acquired 4 million customers. For the first half of 2009, Zain KSA reported gross revenues of $342 million with average revenue per user per month (ARPU) of $19. Zain KSA’s marketing and customer acquisition strategy paid off in the first half of 2009, capturing over 50 percent of total net additions in the mobile telecom market.