Indebted telecoms operator Zain Saudi has appointed Fraser Curley as chief executive, its third CEO in six months, as it seeks a first quarterly profit some four years after launching.
Curley’s appointment came after Zain Saudi, an affiliate of Kuwaiti group Zain, said on Monday it had accepted the resignation of Khalid al-Omar, who will now retire.
Omar was formerly chief executive of Zain’s operations in Kuwait and took over as head of Zain Saudi in October, following the departure of Saad al-Barrak. Barrak was also a former Zain group CEO.
Fraser joined parent Zain in January as adviser to the group CEO in Kuwait, according to his LinkedIn profile.
“Omar was really just an interim appointment to fill a space until the company found a more permanent replacement for Barrak,” said Asim Bukhtiar, Riyad Capital head of research.
“It’s interesting to appoint a Westerner, who should help broaden the expertise of Zain group, which operates in multiple countries.
“Zain Saudi indicated it was expecting regulatory approval for its capital restructuring by the end of February and maybe the CEO appointment indicates this is imminent.”
The management upheaval comes as Zain Saudi tries to repair its balance sheet.
In February, banking sources told Reuters the company was in talks to refinance a $2.5 billion Islamic syndicated loan due in July. It also proposed a capital refinancing.
The firm’s latest loss – 461 million riyals ($122.92 million) in the fourth quarter – brings its accumulated losses to 9.7 billion riyals, or 70 about per cent of its capital. Saudi bourse rules say listed firms must cut their capital if losses exceed 75 percent.
These stresses left Zain Saudi a distant third to wealthier rivals Saudi Telecom Co and Etihad Etisalat (Mobily), its mobile market share falling to 16 percent in 2010 from 18 percent in 2009, according to Zain’s 2010 annual report, the most recent available.
“The biggest issue was that Zain seemed to have lost confidence in its Saudi unit. With the management changes, that confidence appears to have returned and now it’s a question of finding a sustainable strategy for the company,” said Bukhtiar.
“I’m more optimistic than I was two to three quarters ago.”