Telecom Egypt has secured a $500m medium-term syndicated loan to finance capital expenditure and refinance existing short-term facilities.
First Abu Dhabi Bank (FAB) and Mashreq Bank were mandated as joint coordinators, underwriters, bookrunners, and initial mandated lead arrangers of the facility, similar to the medium-term syndicated loan obtained in October 2018. FAB is also the facility agent for the transaction and Mashreq the designated account bank and the documentation agent.
The financing banks also include Ahli United Bank as initial mandated lead arrangers and Abu Dhabi Commercial Bank, National Bank of Kuwait, Arab Banking Corporation, Al Ahli Bank of Kuwait, Arab Bank PLC – Bahrain, and Europe Arab Bank as mandated lead arrangers. Lead arranger is Bank of Jordan and Attijariwafa Bank is arranger.
The new financing agreement reflects the confidence of the international banking sector in Telecom Egypt’s ability to continue its strong financial and operational performance over the coming years, as the new loan period extends to 6 years, which is not the general market norm for dollar loans whose duration does not exceed five years. This is in addition to Telecom Egypt obtaining this loan at a competitive interest rate.
Adel Hamed, Managing Director and CEO of Telecom Egypt, said that the strong operational and financial performance exhibited during the last three years has boosted the confidence of respected international financial institutions in Telecom Egypt, enabling Telecom Egypt to, once again, secure a $500m syndicated loan with the loan being 2.7x oversubscribed.
“The aim of the facility is to convert our short-term USD overdrafts into longer-term loans to enable the company to repay instalments in line with its cash flow generation. The restructuring of our leverage comes in line with our financing strategy, to deleverage over time, while enhancing our financing cost. We are confident that this facility, along with our growing organic performance and certainty on dividends from associates will translate into a greater cash flow flexibility for the company,” he added.