[euro]307 m funding for Romania's MobiFon - Romania

A consortium of international banks has invested [euro]307 m into MobiFon SA Romania's largest private sector mobile phone operator. McCarthy Titrault, a Canadian business law firm, acted for the lenders in putting the financing package together.

"The deal is the biggest private sector financing in Romania and the most comprehensive syndicated funding ever undertaken in Eastern Europe," says a spokesperson for McCarthy Titrault. "The transaction was completed in less than three months and was oversubscribed."

The six-year senior loan financing consists of the EBRD bank providing US$230 m ([euro]236 m), of which US$120 m ([euro]123 m) was provided by international commercial banks.

The operator will now use the proceeds from the loan to repay all existing indebtedness and to fund its growth.

MobiFon (which uses the mobile registered trademark of Connex) has Canada's Telesystem International Wireless (TIW) and Vodafone as its major shareholders, and is controlled by ClearWave -- a subsidiary of TIW.

MobiFon's mobile network covers 97 per cent of the Romanian population and offers roaming through 221 mobile operators in 94 countries. It also offers Romania's first mobile portal called myX and has become an ISP through Xnet. MobiFon had 2,337,000 mobile subscribers by June 2002 and over 190,000 Xnet users.

The second largest operator in the Romanian mobile market is Orange. It entered into the country -- originally under the France Telecom banner -- via the purchase of Dialogue, which began GSM operations in late 1997.

COSMOROM is the third and newest GSM operator in the Romanian telecoms market and is 100 per cent owned by ROM Telecom. It operates in the GSM 1800 band -- the first time that the frequency has ever been used in the country.

A spokesperson for MobiFon says that the operator plans to continue to expand within a market that only has a mobile penetration of 20 per cent. "This shows the real growth potential in the Romanian mobile market," says the spokesperson.

MobiFon and Orange have already rolled out GPRS (4Q 2001). The Romanian Ministry of Communications and Information Technology will organise an international tender to award four licences for 3G, which will be valid for 15 years and will cost US$35 m ([cents]36 m) each. The licence winners will be able to pay in instalments but no fixed date has yet been made by the government to award the licences.

COPYRIGHT 2002 Horizon House Publications, Inc.
COPYRIGHT 2002 Gale Group