Oger Telecom, a leading telecommunications and multimedia holding company with approximately 30 million subscribers under management, announces the US$3.7 billion refinancing of debt facilities associated with its 2005 acquisition of 55% of Turk Telekom, Turkey’s largest telecommunications operator.
As a result of this debt refinancing, Oger Telecom has announced that it will to make the final payment of US$4.31 billion (inclusive of Principal payments due and Interest accrued over the period) to the Turkish Treasury Department, completing the financing period for the acquisition of the 55% of Turk Telekom 4 years ahead of time.
The refinancing comprises of a fully-underwritten eight year US$3.5 billion term loan facility and a US$200 million revolving facility. These facilities have been successfully closed and oversubscribed in the senior phase. The Co-ordinating Bookrunners for these facilities are ABN Amro and Citigroup. BNP Paribas, Calyon, and Fortis are also Mandated Lead Arrangers and Bookrunners.
This landmark transaction is the largest acquisition financing in Turkey and the success of the financing demonstrates the high level of confidence lenders have in Turkey’s significantly improved macroeconomics and investment fundamentals, the company and its sponsors.
The facility allows Oger Telecom to prepay in full the deferred payment financing offered by the Turkish Treasury for the acquisition of 55% of Turk Telekom and at the same time reduce its borrowing costs. The deferred payment financing allowed for the US$6.55 billion acquisition to be paid through an initial down payment of 20%, and the remaining amount paid in five equal, annual instalments, the first of which was paid in November 2006.
Due to the highly successful first phase, lenders have agreed to a reverse flex effectively reducing the margin by 35 basis points (bps) - from a margin of 275 bps over Libor to 240 bps over Libor. The new margin also results in a saving of 10 bps over margin payable on the deferred payment financing. In addition, Oger Telecom no longer has to pay for the costs of the Letter of Credit which was required by the Turkish Treasury. The maturity to the company’s debt increases from the current four to eight years.
Commenting on the refinancing Chairman of Oger Telecom, Mr. Mohammed Hariri said:
“This refinancing of the acquisition of 55% of Turk Telekom is very good news for Oger Telecom and ensures that the Group is now fully funded, smoothing the path toward an Initial Public Offering (IPO). We remain committed to continue our investments in Turk Telekom’s management, employees and technological infrastructure and to create value in national and international arena to make Turk Telekom into one of the leading telecom operators in the world.”
With 30 million customers under management Oger Telecom is a leading provider of telecommunications services in Turkey through Türk Telekom providing PSTN, ISDN and value-added services to residential and business customers in Turkey. Türk Telekom is also a leading provider of ADSL services to both residential and business customers and leased lines to business customers. In addition, Türk Telekom provides wholesale services to other operators in Turkey.
And through Türk Telekom’s shareholding in Avea, the third largest provider of mobile telecommunications services in Turkey Oger Telecom offers a wide range of mobile services, including traditional and value-added voice services, international roaming services and data services (including SMS and value-added services).
In South Africa, Oger Telecom operates a mobile communications business through its indirect shareholding in Cell C.
Oger Telecom also operates as an ISP providing dial-up, ADSL, leased line and VPN services in Saudi Arabia, Lebanon and Jordan through Cyberia.
Oger Telecom Limited is a company incorporated in the Dubai International Financial Centre.
For more information please visit www.ogertelecom.com or email [email protected]
