MOBILY SIGNS MOUS WITH NOKIA SIEMENS AND ERICSSON

30/06/2013 Tadawul

Mobily signed two 90 days MOUs dated 26 Jun 2013 with Nokia Siemens Networks (NSN) and Ericsson to arrange a Long Term Financing of approximately USD 650mn (SAR 2.4bn) for the purpose of acquiring network equipment from Nokia Siemens Networks (NSN) and Ericsson.
Mobily will be working closely with the official Export Credit Agency of Finland (Finnvera) and the Swedish Export Credit Corporation (SEK) to complete the Shariah Compliant transaction.
The purpose of the financing is to lock long term funding at a very competitive rate based on CIRR (Commercial Interest Reference Rate), the rate being used for ECA financing.
The current fixed CIRR is 1.84% per annum (fixed on monthly basis). The total tenor of the facilities is 10 years, with a utilization period of 1.5 years, and an extended repayment period of 8.5 years.
The investment will be used to upgrade enhance the infrastructure capabilities, introduce new technologies, and strengthen the company competitiveness in the business segment.
The proposed ECA financing is considered to be the first of its kind for telecommunication sector for Saudi Arabia, and is expected to have a positive impact on the free cash flow of the company.
Mobily has mandated (Credit Agricole) and (Deutsche Bank) to structure and arrange Shariah Compliant financing, for which the services of (Latham and Watkins) as legal counsel to Mobily and (Allen and Over) as legal counsel to lenders has been sought.
Last, Mobily will continue to seek such form of financing in the future.

 

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