Mubasher: NBK Capital said in an update report on Saudi Arabia’s Etihad Etisalat (Mobily) it retained a “Hold” recommendation on the stock, reducing its fair value estimate to SAR 26.1 per share from SAR 26.7, with 14% upside potential.
Mobily reset the covenants on most of its loans in 4Q2015, reclassifying its total outstanding debt for the second time in 2015. Having breached its net debt-to-EBITDA covenant following the release of its financial restatements, Mobily reclassified all of its outstanding debt (SAR 15,627 million) as a current liability in 2Q2015, said the report issuer.
In light of this successful renegotiation, the company then reclassified around 60% of its outstanding debt as a long-term liability. Mobily’s financial statements show it still to be in negotiations with its creditors to reset the covenants on the remainder of its loans; we expect it to be successful.
Mobily has said that there is currently no clear timeline for the previously reported tower sales, as there are many variables to consider. The company has stated that it is fairly provisioned regarding the Zain Saudi arbitration case, with nothing new to report on the case’s progress.
“We believe that dividend distribution remains unlikely before FY2017,” said NBK Capital.
Mobily earlier posted its financial results for the fourth quarter of 2015, which mirrored SAR 11 million net profit, against SAR 2.10 billion net loss logged in the same period a year ago.
