Zain Saudi Arabia recommends capital reduction, says chairman

Zain Saudi Arabia, one of the kingdom’s top mobile service providers, is recommending a capital reduction in order to improve its financial position, the company said in a statement on Thursday.

The board recommended that the company reduces its capital of SAR 10.8 billion to 5.8 billion by about 45.96 percent in order to write off the company’s accumulated losses, according to Argaam.

“This proposed capital reduction is one of several positive steps being taken by Zain Saudi Arabia to improve its financial position as part of a comprehensive transformation plan, which has been ongoing since the beginning of this year,” said Farhan Bin Naif Al Faisal Al Jarbaa, chairman of the company.

He pointed out that these steps have helped the company improve its earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first nine months of 2014 by 21 percent to reach SAR 825 million, compared with SAR 684 million in the same time last year.

“The company is on a steady path in its implementation of its ambitious transformation plan, and we have already strengthened Zain’s position in the Saudi market by enhancing the performance, developing the network’s infrastructure, expanding sales channels, and increasing point of sales,” said Hassan Kabbani, chief executive of the company in the kingdom.

Kabbani also welcomed the board’s recommendation to reduce capital.