Global Telecom Holding (GTH), the Cairo-based subsidiary of VimpelCom, has secured a 37-months extension on a May 2014 US$2.5bn loan provided by an indirect unit of its parent.
The company said that the renewed loan, whose annual interest rate has been…
Global Telecom Holding (GTH), the Cairo-based subsidiary of VimpelCom, has secured a 37-months extension on a May 2014 US$2.5bn loan provided by an indirect unit of its parent.
The company said that the renewed loan, whose annual interest rate has been increased to 12.5%, gives it “a sufficient period of flexibility to complete the Algeria transaction”.
In April, VimpelCom agreed to sell a 51% stake in Orascom Telecom Algerie (Djezzy), owned via GTH, to Algeria’s sovereign wealth fund for US$2.64bn, thereby ending a long-running dispute with the Algerian government.
As part of the transaction, Djezzy will pay a US$1.86bn dividend to GTH, which will receive a total US$4bn at closing, expected to take place before the end of the year.
GTH said today that once the Algeria deal completes and the company has used the proceeds to pay down its debt, it will review its remaining debt burden and renegotiate or refinance it.
GTH has another US$2.5bn loan provided by a separate VimpelCom subsidiary. That loan has yet to mature and its term will remain unchanged.
Its financial adviser, Pharos, had previously concluded that “GTH has extremely limited ability to secure debt in the commercial market on a standalone basis given its current financial position, leverage levels, the size of the facility and quality and status of its security package”.
