Saudi Arabia's Capital Market Authority (CMA) has approved Mobile Telecommunications Company Saudi Arabia's (Zain KSA) capital restructuring plan, a statement said. The approval follows the decision by Zain KSA's board of directors to seek approval for a reduction of its capital followed by a SR6 billion Rights Issue, the company's statement said. The capital reduction will result in Zain KSA's paid-up capital being reduced from SR14 billion to SR4.801 billion. The Zain KSA paid-up capital will be subsequently increased. The rights issue will consist of shareholders in Zain KSA subscribing for new shares in the company for cash or by capitalising certain subordinated loans made by some of Zain KSA's founding shareholders to the company. The cash proceeds will, subject to obtaining the relevant approvals, mainly be used to reduce the Zain KSA's current liabilities and enhance the quality and performance of its existing network as well as to expand the company's recently launched 4G LTE hi-speed internet network and reduce bank debt, it said. The capitalization of a portion of the shareholder loans will further reduce the debt levels of the Zain KSA. Prince Hussam Bin Saud Bin Abdul Aziz, chairman of Zain KSA, said: "This is an important step in a new era for Zain KSA. Our business is performing in line with expectations, we have a new management team, we are introducing a new strategy with demonstrable support from our largest shareholder, Mobile Telecommunications Company (Zain Group).” – SG/Agencies, and we are now able to propose the restructuring of our capital base to our shareholders. With the support of our shareholders, we can continue to move forward with real confidence". The capital reduction and the Rights Issue are subject to shareholder approval at an extraordinary general assembly of the company, to be held after certain regulatory consents and approvals have been obtained, including the approval from the Ministry of Commerce and Industry to hold the EGA.
