Citibank and ING Bank have arranged three credits, covered by export credit guarantees, to OJSC MegaFon, the third largest mobile phone operator in Russia. The total sum of these credits is US$279.7mn. The export credit guarantees consist of three separate credit arrangements. The credit agencies participating in the arrangements are Finnvera of Finland, EKN of Sweden and Euler Hermes of Germany.
Among the participants, Finnvera is the biggest individual risk-taker with a credit of US$135mn. EKN is granting an export credit of US$53.5mn and Euler Hermes an export credit of Eu75.6mn, some of which has been reinsured by export credit agencies in Austria and Italy.
MegaFon is expanding its operations on the rapidly growing Russian mobile phone market. The credits are used for financing supply contracts signed by the company with Nokia, Ericsson and Siemens. Components for the network are supplied from Finland, Sweden, Germany, Austria and Italy.
At the end of March 2004, MegaFon had about 7.7mn mobile phone clients. The number of mobile phone clients in the whole of Russia at the end of May 2004 totalled about 47mn, or over 30% of the population.
In October 2003, Citibank and ING closed a US$75.4mn facility for MegaFon which involed Hermes (with part Sace reinsurance) and Austria’s OeKB.