Saudi Arabia's Al Rajhi Bank and Banque Saudi Fransi are among five banks underwriting a six billion riyals ($1.6bn) rights issue from indebted telecoms operator Zain Saudi, according to the issue prospectus. Lead manager Saudi Fransi Capital, the investment banking unit of Banque Saudi Fransi, and Rajhi Capital, part of Al Rajhi Bank, will each underwrite 44.8 per cent of the issue's 600 million shares. Albilad Investment will cover 3.81pc, while units of Alinma Bank and Saudi Hollandi Bank will each underwrite 3.33pc. Under Saudi stock market rules, all share offerings must be underwritten. Zain Saudi in May received regulatory approval to cut its share capital to 4.8bn riyals from 14bn riyals to eliminate some of its accumulated losses which stood at 10.1bn riyals at the end of the first quarter. Once this is completed, the operator, an affiliate of Kuwait's Zain, will launch the rights issue. Zain Saudi had liabilities of 22.9bn riyals as of March 31. These include 4.1bn riyals borrowed from shareholders, some of which will be converted into new shares. The offering requires approval of Zain Saudi shareholders scheduled to meet on June 25, Gulf daily News reported.
