The EBRD is considering co-financing the construction and operation of the third GSM 1800/900 MHz mobile phone network in the Moscow License Area, in Russia.
The Bank’s funds would be used to purchase equipment and services required to launch Sonic Duo’s mobile phone network and for working capital purposes.
The EBRD would be supporting the establishment and growth of a new entrant in the Moscow mobile sector, who would increase competition and offer additional customer choice and improved quality of service. The EBRD would be providing long-term financing, which is not otherwise available in Russia, particularly on the tenor and conditions necessary to finance a major infrastructure project. The project would therefore mobilise foreign direct investment in Russia, providing a demonstrative effect by showing that longer-term financing is available in the country on a project finance basis for non-export driven projects.
Sonic Duo, a greenfield start-up company, was awarded a GSM 1800/900 MHz mobile phone license in May 2000. The company will provide mobile phone services in the Moscow License Area encompassing Moscow city and the surrounding region. The company is 35 per cent owned by Sonera Holding (a daughter company of Sonera Corporation, Finland) and 65 per cent owned by CT-Mobile. The majority owner of CT-Mobile is the LV Finance Group, a venture capital and corporate finance advisory boutique, led by Leonid Rozhetskin.
The Bank envisages providing funding of US$ 40 million (€45.6 million equivalent) in the form of a debt of US$ 34 million (€39 million) and quasi-equity – US$ 6 million (€7 million). The EBRD loan would include a US$ 10 million (€11.4 million) loan syndicated to commercial banks. Other co-financiers include IFC, which envisages providing an identical facility and a syndicate of commercial banks, which is expected to provide additional parallel debt financing of US$ 58 million (€66 million), covered by EKN and Ericsson commercial/political guarantees.
US$ 210 million (€239.4 million).
The project has been screened B/0, requiring environmental analysis. This has been carried out on the basis of Sonic Duo’s responses to the EBRD’s telecommunications and media questionnaire. The sponsor obtained all the necessary permits required for the start-up of the project. All other permits will be acquired as operation progresses. The sponsor confirmed that its activities, including the siting and disposal of potentially hazardous materials, and handling of the workers health and safety issues will continue to comply with the relevant EU and national regulatory requirements.
15 Savvinskaya Embankment
11935, Moscow, Russia
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