Etihad GO Telecom Co. — Capital/Financing Update 2012

Jan 21, 2012

Etihad Atheeb Telecommunication Company (GO) Announces the preliminary financial results for the period ended December 31, 2011 (Nine Months) (Continue)

7040 · 21/01/2012 19:07:16 · Announcement #23847 · View on Saudi Exchange

Etihad Atheeb Telecommunication Company (GO) Announces the preliminary financial results for the period ended December 31, 2011 (Nine Months) (Continue)

8. The External audit report brought in the explanatory paragraph the following :

The Company has incurred an operating loss of SR 241 million during the nine month period ended 31 December 2011. As of that date, the Company's current liabilities exceeded its current assets by SR 1.3 billion. As a result of funding required for ongoing operations, the Company's Board of Directors had in their meeting held on 20 Shawal 1431 H (corresponding to 29 September 2010) proposed a rights issue of SR 600 Million, which has been increased to SR 1.175 billion by a resolution dated 27 Rajab 1432H (Corresponding to 29 June 2011). Subsequent to the Capital Market Authority ("CMA")'s approval, the Company's shareholders have approved the rights issue in an Extraordinary General Meeting held on 20 Safar 1433H (corresponding to 14 January 2012). The rights issue is expected to be completed by the Company in the fourth quarter of its financial year ending on 31 March 2012.

Until the successful completion of the rights issue, the Company is dependent on interim funding committed by its founding shareholders. The Company has drawn down SR 119.9 million against the total commitment of SR 390 million from its founding shareholders during the period ended 31 December 2011. The loan from the founding shareholders will be repaid from the proceeds of the rights issue.

As set out in note 2 to these interim financial statements, the proceeds from the rights issue will primarily be used to part settle the outstanding Tawarroq Islamic financing facility to the extent of SR 793 million. The Company has not finalized alternate sources of founding. Even after successful completion of the rights issue, the ability of the Company to continue as a going concern is dependent on its ability to generate sufficient trade cash flows and renegotiate terms of payment with creditors in order to meet operational cash requirements and continue operations.

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