The European Bank for Reconstruction and Development (EBRD) and Standard Bank London Limited has led a consortium of international banks in advancing US$110mn to OJSC Kazakhtelecom to help the largest telecoms operator in Central Asia restructure its debts and modernise its network in the context of the government’s planned liberalisation of the market.
The financing marks the first time that a loan to the Kazakh telecoms sector has been syndicated. The loan was jointly arranged by EBRD and Standard Bank London. The EBRD is the lender of record for the full amount and is providing a seven-year loan using US$60mn of its own funds. The remaining US$50mn, was syndicated by Standard Bank London to commercial banks which are advancing five-year loans under an EBRD A/B loan structure.
Standard, as the joint mandated arranger, underwrote the syndicated portion of the loan and is taking US$9mn onto its books. Raiffeisen Zentralbank Österreich (RZB) and Citibank are acting as arrangers and taking, respectively, US$18mn and US$14mn. Credit Lyonnais and WestLB AG are acting as co-arrangers and taking US$4.5mn each.
Adrian Walker, head of syndications, financial institutions, corporates and sovereigns, at Standard Bank London says: “We are delighted at the positive outcome of this transaction and would like to extend our congratulations to Kazakhtelecom. We are pleased to have worked with EBRD in opening up the medium to long-term international credit markets to top tier Kazakh corporates”.
This loan comes at an important time for Kazakhtelecom given that the government is committed to start liberalisation of the country’s telecoms market in 2004, claims Izzet Güney, director of the EBRD’s telecoms team.
Güney adds that this new loan and the access Kazakhtelecom is gaining to international capital markets through this transaction will help it optimise its funding costs and also invest in the development of its network, two key targets ahead of the company’s planned privatisation.