Landmark US$ 2.5 Billion Murabaha financing facility to support Zain Saudi Arabia's future growth
Zain Saudi Arabia (“Zain KSA”) today held the closing for a US$ 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. 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 Advisors, with a total of eight regional and international financial institutions participating in what is one of the largest Islamic financings this year.
Al Rajhi Bank, Banque Saudi Fransi and Calyon acted as Initial Mandated Lead Arrangers and Bookrunners, while National Bank of Kuwait (NBK) and Arab National Bank (ANB) acting as Senior Mandated Lead Arrangers and Bookrunners. Saudi British Bank (SABB) acted as the Senior Mandated Lead Arranger with Gulf Bank and Standard Bank acting as Mandated Lead Arrangers.
“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 Dr 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 US$ 342 million with Average Revenue Per User Per Month (ARPU) of US$ 19. Zain KSA’s marketing and customer acquisition strategy paid off in the first half of 2009, capturing over 50% of total net additions in the mobile telecom market. The company’s state-of-the-art network covers 65% of the populated areas – the remaining areas are now covered through national roaming agreements – with 85% targeted by the end of 2009.
“Despite the challenging financial environment and a shortage of liquidity, the successful closing of this Murabaha is a testament to Zain’s strong relationships with the banking community, the Group’s financial health and overall confidence in the Kingdom of Saudi Arabia and beyond,” said Mr Sam Deeb, Chief Financial Officer of Zain Group. “This is an excellent addition to Zain Group’s enviable track record of successfully raising over US$ 25 billion over the last five years.”
Zain KSA is a key member of ‘One Network’, Zain’s award-winning borderless mobile platform that allows Zain’s travelling customers in 21 countries to receive incoming calls from their home country for free and making outgoing calls and sms at local rates. The benefits of “One Network’ are especially evident during the holy month of Ramadan when millions of Zain customers from neighboring Arab nations, not to mention African countries such as Sudan and Nigeria, visit the Kingdom.