Zain Saudi Arabia, the Kingdom's third mobile operator, offered shareholders to cut its capital by almost half to cover accumulated losses, and later launch a rights issue to raise it by nearly 60 percent. Zain Saudi's board offered on Saturday the capital restructuring plan for the operator which has paid $6 billion for a license to operate in the biggest Arab economy and has come under intense pressure from rivals Saudi Telecom and Mobily. About two years after starting its business, Zain Saudi's accumulated losses reached $1.78 billion by end-June 2010. Riyad Capital said this week Zain Saudi's continued dependence on external financing poses a threat to its growth plans. The board invited shareholders to vote for a proposal to cancel shares worth 47.6 percent of its total SR14 billion ($3.73 billion), Zain Saudi said in a statement. No date has been set for the shareholders assembly. If shareholders approve the capital reduction, the board will invite them to vote for a rights issue for 438.3 million shares to raise the new paid-up capital to SR11.7 billion, it added. Kuwait's Zain holds a 25 percent stake in Zain Saudi Arabia. Shares in Zain Saudi Arabia rose by up to 6.8 percent on Saturday after details of the capital restructuring plan were announced, having lost 65 percent since it started commercial operations in August 2008. However, it posted its lowest quarterly loss during the second quarter after doubling revenues. Chief executive Saad Al-Barrak said in May the firm would finalise a capital increase plan in June. In February, Barrak said the firm will raise its capital by 30 percent in 2010, half of which would be through converting debt worth $577 million into equity and the other half from founding shareholders. Zain Saudi has said it expects a 25 percent rise in customers and more focus on broadband services to deliver revenue growth of at least 80 percent in 2010, which would help it record positive core earnings before interest, taxes, depreciation and amortization (Ebitda). In 2009, it had a revenue of 3 billion riyals but its net loss amounted to about the same amount in the period.