Zain capital increase raises $4.34bn

The number of subscribed shares exceeded 1.4 billion, bringing the total number of Zain shares to 4.28 billion with total shareholders' equity reaching $6.42bn.

The amount raised is unprecedented in Kuwaiti's history exceeding all expectations, given the gloomy trends that have recently dominated local and international markets and resulted in sharp declines in the prices of oil as well as significant collapses in the financial markets worldwide.

"The successful completion of the largest capital increase in the history of Kuwait is an unanimous vote of confidence by our shareholders in Zain's management team, the performance to date and in our profitable expansion strategy aiming to be a top-ten global mobile operator by 2011," said the Zain's Chief Executive Officer Dr Saad Al Barrak, adding that "the proceeds of this capital increase will be used to finance future strategic expansion plans and meet financial commitments."

Zain has managed to achieve unprecedented leaps in the global mobile telecommunications sector over the past 5 years to be now present in 22 countries on two continents serving over 50 million active customers.

Every Zain shareholder of record on 10 March 2008, the date the company held its ordinary and extraordinary General Assembly Meeting was eligible to subscribe to a number of capital increase shares equal to 75% of the total number of shares they held on this date. The capital increase subscription price was 850 fils (approximately $3.20) per share i.e. a par value of 100 fils per share plus a premium of 750 fils. The subscription period commenced August 17 and closed on September 18, 2008.

"All the Group's financial indicators are now geared up to witness exponential growth on the back of Zain's huge investments in expansion projects in many of the Middle East and African markets in which we operate. We expect these investments to bring about substantial increases in the Group's future revenues and net profits,"

commented Dr Al Barrak.

The National Bank of Kuwait (NBK) through its local and international branches acted as the receiving bank for the capital increase.

Commending the role the bank played in this successful capital raising, Dr Al Barrak said, "NBK has always been our partner ever since we took our first expansionary step in Jordan way back in 2003. It has successfully managed several of Zain's acquisition transactions to date and exceptionally managed this and Zain's previous 100% capital increase back in November 2005."