Oger Telecom to raise $4.3b through debtKhaleejTimes writes…Dubai-based Oger Telecom is in the process of raising $4.3 billion through a loan, according to investment banking sources.
Sources said yesterday that five banks have been mandated to arrange the loan which will be used to finance Oger Telecom’s 55 per cent acquisition of Turk Telekom.
The mandated lead arrangers according to sources are ABN Amro, Citigroup, BNP Paribas, Calyon and Fortis Bank. Oger Telecom, part of the Saudi Oger group, which is controlled by the family of the late Lebanese prime minister Rafiq Hariri, agreed to acquire a 55 per cent stake in Türk Telekom for $6.5 billion from the Turkish government.
Payment for the majority stake was agreed over a five-year period in equal instalments. Oger paid 20 per cent of the total in cash in 2005 and is due to pay the rest in five equal instalments with an interest rate of Libor plus 2.5 percentage points.
The new facility is aimed at financing the final payments and refinancing the earlier two instalments.
“Oger Telecom has made two payments already but wanted to accelerate the remaining instalments by paying for the stake at an earlier date. An earlier payment for the 55 per cent stake in Türk Telekom will tidy up the the financing arrangements for the acquisition, which may have implications for a planned initial public offering (IPO).
Oger had admitted to plans to borrow from international markets following its decision to cancel its IPO in November last year. Oger telecom which announced its plans to raise $1.25 billion through an IPO pulled out of the deal following the poor performance of Gulf markets. The cancelled IPO included listing of Global Depository Receipts (GDRs) on London Stock Exchange and a $150 million IPO on the Dubai International Financial Exchange.
Following the pull out from the IPO, the company management clarified the public issue has been merely postponed. The company may decide to relaunch its IPO should market conditions prove favourable.
Discussions are currently taking place with second-tier banks to commit to the $4.3 billion loan facilities, sources said, and general syndication is likely to be launched by the middle to the end of February.
The firm had wanted to list in part so that it could qualify for a mobile phone licence tender in Saudi Arabia due for 2007 as the company failed to qualify on a previous attempt because it was not a listed company. But with the removal of that requirement there is no urgency to launch an IPO.
Meanwhile, technically, the Turkish Treasury is qualified to launch an initial public offering to off-load its 45-per cent stake in Turk Telekom.
However, the Turkish government is yet to take any decision on how much it wants to sell and when it wants to sell.
