WASHINGTON, D.C., April 23—The International Finance Corporation, ING Barings (ING) and Société Générale (SG) have finalized the largest private financing ever undertaken in Romania, for Mobil Rom S.A., to establish a nation-wide Global System for Mobile Communications (GSM) cellular telephone network.
The financing package consists of a US$210 million IFC investment, including a senior loan of US$40 million and a subordinated loan of US$10 million, both for the IFC account, and a syndicated B-loan of US$160 million for the account of participating banks jointly arranged by IFC, ING and SG.
Mobil Rom, one of two private GSM cellular companies operating in Romania, has a 10-year license granted in 1996 by the Ministry of Communications. Since the start of operations in June 1997, Mobil Rom has out-performed its original estimates and has already acquired 150,000 subscribers. The financing package represents the initial three years of the company’s investment program, together with the repayment of a US$100 million bridge loan arranged by ING and SG.
The shareholders of Mobil Rom S.A., are France Telecom Mobile International (FTMI), MediaCom ’95, Unimedia, Radcom, MBL Computers, Tomen Telecom Romania and Alcatel Network Systems Romania. FTMI is the international arm for the cellular operations of France Telecom, the main French telephone operator, with investments in cellular operations in several Asian, European and Middle-East-North African countries. MediaCom is a Romanian media group involved in print and electronic media businesses. CME and Computerland Group-USA, Tomen Corporation-Japan, and Alcatel-France are other sponsors.
By making its first investment in Romania’s telecommunications sector, IFC is helping to upgrade the country’s infrastructure while encouraging more private initiatives. The three arrangers, IFC (Lender of Record), ING (Security Agent), and SG (Bookrunner) have worked in close co-operation towards the success of this major transaction for Romania and ten additional international banks have joined the syndicated B-loan: Berliner Bank, Banca Nazionale del Lavoro, Erste Bank, Banque Nationale de Paris, Crédit Local de France-Dexia, Crédit Lyonnais, Kredietbank, Sakura Bank, Banque Worms, and Cera Bank.
The loan agreement for the IFC Investment was signed on behalf of IFC by Mr. Kent Lupberger, Manager of Telecommunications, and on behalf of Mobil Rom S.A. by Mr. Andrei Chirica, President. Mr. Lupberger said, "Mobil Rom provides access to cost effective and reliable telecommunications services, thereby increasing efficiency and competitiveness, and promoting economic development."
ING, a major international financial institution was the main arranger and financier for telecom projects in Central and Eastern Europe in 1997. Its strong local presence and its knowledge of the telecom sector add to this record. Mr. Katz, head of Telecommunication Finance said, "the Romanian market has enormous potential and Mobil Rom’s performance to date is another example of the success of mobile telephony in the region".
SG, a major bank in project finance world-wide and IFR European Loan House of the Year in 1997 has exploited its extensive global expertise in the telecom sector for the benefit of its customers by arranging a large number of telecommunications financings over the last year. Gaëlle Muller, Head of Telecommunications and IT Project and Sectorial Finance said that "prospects are good for Romania to be able to increase its access to the international capital market. Based on its 21 years of presence in the country, SG is well established in Romania and uses this unique position to serve its clients’ needs with the highest standards".
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 invested $2.3 billion in telecommunications projects world-wide, of which US$1 billion was for IFC’s account.