RIYADH: Loss-making mobile operator Zain Saudi Arabia does not face any financing pressure despite huge investments it has made, its chief executive said on television, reiterating it might raise its capital.The company, which is 25 percent owned by Kuwait's Zain, said in January it was in talks with creditors after missing some commitments last year on a 2.5 billion US dollar Islamic loan.It started operations late in 2008 after paying with other investors $6 billion to win the third Saudi mobile license. It competes with larger rivals Saudi Telecom and Mobily."There is no funding pressure due to our heavy investments," Chief Executive Saad Al-Barrak told Al-Arabiya television, a day after posting a quarterly net loss of 663 million Saudi riyals.He said the company was studying all options to either increase or reduce its capital but has not made a final decision.Zain's auditors said in an addendum to this week's earnings statement that Zain's liabilities exceeded assets but the firm was confident it would honor its obligations."Our choice is clear to resort to a capital hike. It is normal as companies in the beginning do not need a big capital but depend on loans but we did not reach a final decision as to how, which mechanism to implement and to secure the stock market's permit," Al-Barrak said.In February, Al-Barrak said the company will seek a 30 percent capital increase in 2010, half of which would be through converting debt worth $577 million into equity and the other half from founding shareholders.On Wednesday, he said the firm would also consider decreasing its capital to wipe off its accumulated losses.Zain stock ended down 0.6 percent on Wednesday, while the benchmark closed up 0.2 percent.
Source: AlWatanDaily
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