Russian state-owned telecom operator Rostelecom (MOEX:RTKM) has secured a seven-year credit line worth Rbs15.6bn (US$276.5m) with VTB Bank.
The company will use the funds to modernise the IP/MPLS backbone network, improving capacity and bandwidth,…
Russian state-owned telecom operator Rostelecom (MOEX:RTKM) has secured a seven-year credit line worth Rbs15.6bn (US$276.5m) with VTB Bank.
The company will use the funds to modernise the IP/MPLS backbone network, improving capacity and bandwidth, an executive explained. The loan will cover 80% of the project, with the remainder to be financed by the company’s own funds or by “other means of financing,” she added.
As reported in April, the telco applied for the loan via a government project financing scheme providing funding for projects worth up to Rbs20bn (US$354m).
The company’s ‘Digital Framework Russia’ network development project is expected to cost a total Rbs19.5bn (US$345m), with the difference paid in equity.
Participating companies can borrow a maximum 80% of the total cost. Banks within the central bank’s framework, such as VTB, can refinance loans at 9% per annum, while borrowers themselves pay a maximum interest rate of 11.5%.
Earlier this year, Rostelecom president Sergey Kalugin said the company was seeking about Rbs60bn (US$1.4bn) in project financing under the government scheme to construct data centres, modernise the IP/MPLS network and roll out fibre broadband.
Tele2 Russia, with which Rostelecom has a mobile joint venture, has reportedly already secured a Rbs16bn (US$283m) loan from VTB under the scheme to fund the roll-out of a network in Moscow. Kalugin has been cited saying Telek2 Russia is likely to receive a second Rbs16bn (US$283m) loan under the scheme to finance the construction of a network in the regions.
