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$250 million in long-term EBRD funds for Russia’s largest mobile operator
The EBRD has made a new eight-year loan of $112 million to Mobile TeleSystems
(MTS), Russia’s largest mobile phone operator, and extended the maturity of an
earlier loan to provide total long-term funding of $250 million for the
planned expansion of the MTS network across the regions of Russia and some of
its neighbours in the Commonwealth of Independent States.
David Cooper, the EBRD’s Acting Director of the Telecommunications,
Informatics & Media team, said the loan will help MTS roll out in Russian
regions where it currently does not operate, increase the capacity and the
variety of services in other regions outside of Moscow and St Petersburg as
well as other CIS countries.
The long-term EBRD financing will complement parallel three and five-year
loans totalling $1.33 billion being put together for this ambitious regional
roll-out by a syndicate of commercial banks.
In addition to providing new funding, the EBRD has extended the maturity of
$138 million outstanding under an existing $150 million loan disbursed in
2004, bringing the total of the long-term funding to $250 million.
Marina Zabolotneva, Head of MTS’s treasury, said the facility will allow the
company to finance its business development in order to become a leader in
providing high quality service to a growing number of customers and improve
the efficiency of the business. MTS will use the EBRD funding to finance
further expansion of its mobile network into the Russian regions and the CIS
countries as well as the financial restructuring and technological upgrade of
its subsidiaries.
The company has licenses to operate in 86 of the 88 regions into which Russia
is sub-divided. The area covers 142 million people, or 98 percent of the
country’s population. MTS also operates in the Commonwealth of Independent
States.
There are approximately 134.7 million mobile phone users in Russia, providing
a mobile penetration of 92.8 per cent. MTS, which had approximately 64.2
million subscribers as of April 2006, is 53 per cent owned by Sistema,
Russia’s largest private sector consumer-services company, and 47 per cent of
its shares are listed on NYSE.
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