WASHINGTON, D.C., April 9, 1999 ---
The International Finance Corporation, together with Dresdner Kleinwort Benson (DrKB), Société Générale (SG) and WestLB have finalized the largest private financing ever undertaken in Moldova, for Voxtel S.A. to establish a nation-wide Global Systems for Mobile Communications (GSM) cellular telephone network.
Voxtel, a private cellular operator in Moldova, was granted a 15-year GSM license by the Ministry of Transport and Communications. It started digital GSM operations in October 1998 during difficult economic times in Moldova, but has nonetheless attracted more than 9,000 subscribers to its networks. The company already operates a nationwide NMT (Nordic Mobile Telephone) 450 network.
IFC's US$40 million debt financing package consists of a senior loan of $10 million and a subordinated loan of $5 million, both for IFC's account, and a syndicated IFC B Loan of $25 million for the account of Dresdner and Société Générale, which jointly underwrote the IFC B Loan, as well as WestLB. IFC is also investing in 5 percent of Voxtel's share capital.
The financing package covers the initial three years of the company's investment program.
The shareholders of Voxtel are France Telecom Mobile International (FTMI), Moldovan Mobile Telephone Bis (MMT), Moldtelecom and Mobil Rom. FTMI is the international subsidiary for cellular operations of France Telecom with a strong presence in Europe, including investments in Moldova, Poland, Romania and Slovakia. MMT has interests in the Moldovan telecom sector as well as construction, financial services and media. Moldtelecom is the national fixed line operator of Moldova. Mobil Rom is one of the two GSM cellular operators in Romania. Both FTMI and Mobil Rom provide operational and technical support to Voxtel.
The loan agreement for the IFC investment was signed by Mr. Kent Lupberger, Telecommunications Manager at IFC and Mr. Luc Solente, Director General of Voxtel. Mr. Lupberger said that by making its first investment in the Moldovan telecommunication sector, IFC is helping to upgrade the country's infrastructure while encouraging further private initiatives. The company's modern nationwide cellular networks support the urgent needs for more and better telecommunications services of an emerging business community, including many small- and medium-sized enterprises, he said.
SG, which has developed expertise in the telecommunication sector, committed at the earliest stage of this project because it is convinced of the potential of the Moldovan telecommunication market, according to Gaëlle Muller, Managing Director at SG in charge of Telecommunications and IT. She said that the expansion of the telecommunication infrastructure in Moldova is essential to the long term development of the country and would be part of the proven success of mobile telephony in Eastern Europe.
DrKB is known for its commitment to institutional development in Eastern Europe, as well as its expertise in the telecommunication sector. The establishment of Moldova's telephone system, constitutes an important cornerstone for the enhancement of Moldova's structural and economic development. Dresdner Bank Luxembourg S.A., the lending office, is an arranger and provider of funds in this transaction.
IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses. To date, IFC has approved investments of $2.3 billion in telecommunications projects worldwide, of which $1 billion was for IFC's account.
