UAE-based operator Emirates Integrated Telecommunications Company (Du) has inked a US$1.17bn facility, split into three separate transactions.
Most of the total amount – US$920m – will be used to refinance existing debt facilities while the…
UAE-based operator Emirates Integrated Telecommunications Company (Du) has inked a US$1.17bn facility, split into three separate transactions.
Most of the total amount – US$920m – will be used to refinance existing debt facilities while the remaining US$250m will go towards capex.
The first facility is a US$720m five-year club deal provided by Abu Dhabi Commercial Bank, National Bank of Abu Dhabi and Samba Financial Group. It will replace a US$220m three-year loan maturing in June and a US$500m five-year expiring in 2017. The club deal’s margin has been set at 120bps over Libor, and an all-in cost of 140bps, “saving the company US$7m over the five years”.
The second deal is a US$300m five-year loan provided by Standard Chartered. Of this amount, US$100m will be used for refinancing while the remaining US$200m are new facilities. Margin on the five-year loan is at 115bps, and an all-in cost of 140bps, allowing Du to save US$1.2m over five years.
The third transaction is a US$150m three-year loan from DBS Singapore. It includes a US$100m refi facility and US$50m in new funding. The margin is at 120bps over Libor and an all-in cost of 140bps, saving the company US$800,000 over three years.
Commenting on the funding, Du CEO Osman Sultan said: “We have taken the opportunity of the historical low interest rate environment to refinance some of our existing debt and have been able to negotiate very favourable terms strengthening our balance sheet.”
He added that the structure of the financing will save Du “US$9m in costs, increasing shareholder value and providing scope for future growth”.
Du provides mobile, fixed and broadband services. It is the UAE’s second-largest mobile player and is listed on the Dubai Financial Market. Its majority shareholder is sovereign wealth fund Emirates Investment Authority.
