Zain Saudi Arabia, the Kingdom's newest mobile phone operator, said on Saturday it is in talks with lenders after missing some commitments last year on a two-year $2.5-billion Islamic loan. Shares in Zain Saudi Arabia slipped 1.47 percent in the wake of the news, dragging the main index of the Saudi bourse – the only regional market trading on Saturday – 2 percent into the red. Zain Saudi Arabia said its creditors pardoned it under the condition they agree to a financial plan for 2010 which will be presented by the firm, the company said in a statement published on the Saudi bourse's website as an addendum to its earnings statement on Tuesday. “The firm is in contact with creditors to provide them with this information based on the company's current financial forecasts to ensure that it honors these commitments for the quarterly periods (2010),” it said citing an auditors' note. It said however its ability “to ensure a timely delivery on commitments and to continue in its business hinges on the firm's ability to ensure adequate funds on time and also on its success in discussing and changing some of the commitments for the four quarters to end-December, 2010.” It did not disclose details on the size of the missed commitments nor about the banks involved in the talks. It said, however, that current liabilities at the end of 2009 exceeded its current assets by SR4.9 billion. The firm announced in August that it secured a $2.5 billion Murabaha financing facility. Under a Murabaha deal, an Islamic bank buys an asset from a third party and sells it to its customer at cost plus profit. A successful conclusion to Zain Saudi Arabia's talks with the creditors “would enable it continue classifying this ($2.5 billion) financing as a non-current liability,” it added. “The company's management believes that it will succeed in the talks with creditors and obtain approval for changes in commitments and also succeed in its efforts to secure enough funds that will enable the company to honor its commitments in time through normal operations,” Zain Saudi Arabia said. The two-year facility was granted to repay a previous Murabaha. The term of the facility was two years with options of extending for a further 12 months, Zain Saudi Arabia said last year in the statement that announced the closing of the Murabaha. Zain Saudi Arabia paid $6.1 billion for a 25-year license to enter the Saudi market. About 15 months after it started business, the company claims an 18-percent market share. Zain Saudi Arabia narrowed its net loss by 29.4 percent in the fourth quarter after its quarterly revenues more than doubled to a record SR895 million – still 36 percent below the total amount of quarterly installments for the Murabaha and the license fee. Its net loss for all of 2009 swelled 36 percent to SR3.1 billion after SR2.28 billion loss in 2008. Al Rajhi Bank, Banque Saudi Fransi and Calyon were initial mandated lead arrangers and bookrunners, while National Bank of Kuwait, and Arab National Bank acted as senior mandated lead arrangers and bookrunners, it said. Saudi British Bank acted as the senior mandated lead arranger with Gulf Bank and Standard Bank acting as mandated lead arrangers, Zain Saudi Arabia said. Zain Saudi Arabia announced a net loss of SR657 million for the three months ended Dec. 31, 2009. Operating losses declined 44.3 percent to SR436 million in the same period. Losses have contracted by over 29 percent year-on
