The creditors pardoned the affiliate of Kuwait's Zain on condition they agree to a financial plan for 2010 which will be presented by the firm, it said in a statement published on the Saudi bourse's website as an addendum to its earnings statement on Tuesday.
"The firm is in contact with creditors to provide them with this information based on the company's current financial forecasts to ensure that it honours these commitments for the quarterly periods (2010)," it said.
Shares in the firm slipped 1.47 per cent on the Saudi exchange in the wake of the news, pulling the main index Takaful into the red.
It said however its ability "to ensure a timely delivery on commitments and to continue in its business hinges on the firm's ability to ensure adequate funds on time and also on its success in discussing and changing some of the commitments for the four quarters to end-December, 2010".
It did not disclose details on the size of the missed commitments nor about the banks involved in the talks. Zain Saudi Arabia announced in August that it secured a $2.5 billion Murabaha financing facility.
The two-year facility was granted to repay a previous murabaha. The term of the facility was two years with options of extending for a further 12 months, Zain Saudi Arabia said last year in the statement that announced the closing of the murabaha.
Al Rajhi Bank, Banque Saudi Fransi and Calyon were initial mandated lead arrangers and bookrunners, while National Bank of Kuwait and Arab National Bank acted as senior mandated lead arrangers and bookrunners, it said.
Saudi British Bank acted as the senior mandated lead arranger with Gulf Bank and Standard Bank acting as mandated lead arrangers, Zain Saudi Arabia said.
Under a murabaha deal, an Islamic bank buys an asset from a third party and sells it to its customer at cost plus profit. This allows the bank to extend financing without charging interest, which is forbidden by Islamic law.
Zain Saudi Arabia narrowed its net loss by 29.4 per cent in the fourth quarter after its quarterly revenues more than doubled to a record 895 million riyals helped by an 18 per cent market share. But its net loss for all of 2009 swelled 36 per cent to 3.1 billion riyals.
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