Avea gets $1.6-billion syndicated loan to deal with toughening competition
Posted by meb at April 19th, 2007
Turkey’s third-largest mobile phone operator, Avea, secured a $1.6 billion syndicated loan on Thursday. The signing ceremony for the loan was held yesterday with the participation of Avea CEO Cüneyt Türktan, Türk Telekom Chairman Paul Doany and the representatives of loan provider bodies.
Avea will use the loan for new investments and to restructure its existing loans and operational expenses. International Finance Corporation (IFC) — a member of World Bank Group — and ABN Amro will be the global coordinators of the loan, of which the maturity dates will be set at eight to nine years depending on the credit shares of the participated bodies. Twenty financial institutions participated in the loan including many commercial banks, export credit banks and development banks. IFC’s contribution to the syndicated loan was $420 million, commercial banks were $507 million, Servizi Assicurativi del Commercio Estero’s (SACE) was $300 million, Export Development Canada (EDC) was $100 million, Exportkreditnamden (EKN) was $173 million and Development banks’ were $100 million.
Speaking at the signing ceremony, Türktan said the $1.6-billion loan would help them to make long-term plans and said the participation of many banks and financial institutions demonstrated trust in Avea and Turkey. In response to a question about the entrance of Vodafone to the market, Türktan replied the move would boost both the market and the competition and that this would be beneficial to Avea. “To play with talented players in the game will positively affect both us and the telecommunications sector,” he said. Türktan said in response to a question that infrastructure investments in the sector generally carried high costs and that to achieve all of them with short-term funds was difficult; yet this loan would provide them the means to make long term investment plans.
He said that although they were not open to the public they had a strong financial structure with the partnerships of Türk Telekom –Turkey’s only fixed-line operator — and İş Bankası, Turkey’s largest private bank. Türktan noted they would go public when the right time comes. Türk Telekom Chairman Paul Doany said in response to a question about Turkcell’s appeal against GSM number portability that it was a common practice worldwide and that it must also be implemented in Turkey.
ABN Amro representative Douglas Kennedy said it was a successful financing and that many banks and financial bodies had applied to participate in the loan. “Ultimately the loan supply exceeded the demand,” he said.
source: Today’s Zaman
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