Triple-play operator Jazztel has secured a facility of up to €150m (US$206m) with the European Investment Bank (EIB) to finance the deployment of fibre-to-the-home (FTTH) to three million homes and businesses across Spain.
The Madrid-based telco said…
Triple-play operator Jazztel has secured a facility of up to €150m (US$206m) with the European Investment Bank (EIB) to finance the deployment of fibre-to-the-home (FTTH) to three million homes and businesses across Spain.
The Madrid-based telco said it would add the EIB debt to the €450m vendor financing it has already secured from China Development Bank, which is funding 85% of its contract with ZTE.
The facility will mature after seven years, and has a three-year grace period after that. Jazztel estimates the interest to be below Euribor, plus 250 bps.
In a statement Jazztel added that the “advantageous agreement conditions” of the EIB loan will allow it to reduce its cost of financing. The EIB requires the loan to be secured by a bank guarantee from a “suitable” institution and Jazztel said it is in negotiations to secure this.
The operator requested to borrow €150m from the EIB last July to help fund its €590m fibre network rollout project in several cities simultaneously, including Madrid, Barcelona, Valencia, Malaga and Seville. The project includes investments in the backbone network and IT systems.
Jazztel’s share price has risen more than 41% since the start of the year in anticipation of consolidation in Spanish telecoms. Last month mobile operator Vodafone acquired cableco Ono for €7.2bn.
Analysts have previously told TelecomFinance that the Ono deal was likely to be the catalyst for M&A in Spain as it leaves Orange, the third largest mobile operator, unable to offer the same packages as its two larger rivals.
In late March it was reported that Orange had mandated BofA Merrill Lunch to examine its options in Spain, including a potential takeover of Jazztel.
