Du,
the second telecom operator in the UAE, is to
borrow Dh3 billion ($817 million) in syndicated
loans to finance its infrastructure expansion,
said a top company official.
The successful closure of the deal with a group
of banks, led by Dubai-based Mashreq, is
expected to be announced today in Dubai.
Du CEO Osman Sultan told Emirates Business that
the company will raise its capital expenditure
to Dh2 billion by the end of the year to fund
its infrastructure upgrade that will improve its
coverage and services. The syndication was
launched last month with Mashreq and WestLB as
lead arrangers and bookrunners. The three-year
loan pays a margin of 125 basis points over
Libor.
Du has continued its extensive capital
expenditure programme, expanding both its fixed
and mobile networks, and invested Dh491 million
in the quarter ended June 30, 2008, bringing
year-to-date investment to Dh888m.
The loan deal will make du the first telecom
operator in the UAE to go to the syndication
market. Oman Telecommunications Company (Omantel)
was the first GCC government-owned operator to
raise funds through this route. Mashreq had
arranged $205m (Dh750m) financing facility for
Omantel. The syndicated loan was oversubscribed
by 40 per cent and it was granted at an interest
rate of 87.5 basis points over the Libor, on a
three-year term.
It is understood that Mashreq is negotiating
with several clients to arrange syndicated loans
during the next few months.
Abbas Hasan, head of investment banking at
Mashreq, had told Emirates Business earlier that
Mashreq was engaged extensively in the
syndication market during the past five years as
part of its corporate banking services.
Last week, UAE telecom major etisalat said it
received its inaugural international corporate
credit ratings from Moody’s (Aa2), Standard &
Poor’s (A+) and Fitch (AA-). Salem Ali Al
Sharhan, Chief Financial Officer of etisalat,
said the strong credit ratings will help further
diversify its funding sources.
Du,
the second telecom operator in the UAE, is to
borrow Dh3 billion ($817 million) in syndicated
loans to finance its infrastructure expansion,
said a top company official.
