Israel’s Cellcom (TASE:CEL) has secured a NIS140m (US$35.5m) deferred loan which it will receive in December 2016.
Israel’s Cellcom (TASE:CEL) has secured a NIS140m (US$35.5m) deferred loan which it will receive in December 2016.
The six-year loan carries a fixed interest rate of 4.9% and was agreed with an unspecified Israeli bank.
Cellcom will repay the debt in five equal payments every June between 2018 and 2022. The operator is required to pay a commitment fee now and is obliged to pay the bank compensation if it backs out of the loan before the draw date.
On 13 August, Cellcom revealed disappointing Q2 results, which were blamed on Israel’s ultra competitive mobile market.
Commenting at the time, Cellcom CEO Nir Sztern said: “The influence of the fierce competition, apparent in the quarter’s results, was manifested, among others, in erosion in revenues and profitability.
“The quarter was further influenced by high financing expenses in comparison to the former quarter and another voluntary retirement process.”
In May, Cellcom agreed to two separate deferred loans with two undisclosed banks worth a combined NIS400m (US$103m), which will be provided in 2016 and 2017.
In April, rival Bezeq announced that it had secured a NIS600m credit line for 2016, which it would use to recycle debt. Another competitor, Partner, agreed a NIS275m loan.
Cellcom had some 2.67 million subscribers as of the end of 2014. In July, it received approval from local competition regulators to share passive infrastructure with Bezeq.
Under the 10-year pact, signed in September 2014, the rivals may share maintenance services for passive elements of cell sites, which includes unifying them and streamlining costs through a common contractor.