Subscription to 5-year senior unsecured bonds in the amount of €12 million issued by Telekom Slovenije d.d. ("Telekom Slovenije"), a comprehensive communications service provider in Slovenia with regional operations in South-Eastern Europe. The total bond program amounts to €100 million and has been issued and registered at the owners' accounts at the Central Securities Clearing Corporation (KDD) in compliance with the rules of KDD. Telekom Slovenije will prepare the prospectus for regulated trading with the bonds at the Ljubljana Stock Exchange and following the approval of the prospectus, the bonds will be listed for regulated market at the Ljubljana Stock Exchange. The bond program was placed with a large group of local investors including pension funds, investment funds and insurance companies. The bond issue fulfils Telekom Slovenije's borrowing plan for 2016, significantly improving the structure of its financing sources. Telekom Slovenije will use the bond proceeds for financing investments. The Telekom Slovenije Group will spend up to €156 million on investments in 2016, up by 38% y-o-y. Geographically, the majority of investments will be allocated to Slovenia, followed by Kosovo.
The proceeds of the bond will be used for capital expenditure across Telekom Slovenije and its subsidiaries and the EBRD proceeds, through a use of proceeds clause in a framework agreement, will be earmarked to finance capital expenditure dedicated to the introduction of new technology and the expansion of communication networks in the both fixed line and mobile segments in Kosovo.
The transition impact of this project is consistent with the Bank's strategy for Kosovo and the ICT sector. The project will facilitate market expansion by addressing the challenges of low broadband penetration in Kosovo. High speed broadband networks are considered an important part of the essential information infrastructure necessary to support modern knowledge based economies and the competitiveness of businesses in the country. The EBRD proceeds will be dedicated to improving the availability and quality/speed of advanced broadband services in Kosovo, including in rural areas.
The project is expected to substantially increase the overall coverage by 4G/LTE services in the market and expand the broadband penetration in Kosovo.
Telekom Slovenije is the incumbent and majority state-owned telecommunications operator in Slovenia, providing integrated telecommunications services in Slovenia with regional operations in South-Eastern Europe, including Kosovo, Bosnia Herzegovina, Macedonia, Serbia, Croatia and
EBRD Finance Summary
This is a €12 million subscription to senior unsecured Euro denominated bonds issued at the Ljubljana Stock Exchange.
Total Project Cost
The total nominal value of the bond issue is €100 million, and 100,000 bonds with the value of €1,000 were issued. The remaining €88 million of the total €100 million bond (in addition to EBRD's €12 million subscription) have been subscribed largely by domestic investors.
Environmental and Social Summary
The Project was categorised B by EBRD in accordance with 2014 EBRD Environmental and Social Policy. This means that environmental and social impacts associated with the Project can be readily identified and addressed by adequate mitigation measures. ESDD carried out by EBRD’s environmental staff comprised of reviews of 2015 Corporate Annual Report, responses to the key environmental and social questions and follow up communication with the Company.
ESDD showed that Telekom Slovenije is publicly committed to environmental and social sustainability and has adequate environmental and social risk management capacities to implement the project in compliance with EBRD Performance Requirements (PRs). The Company is in compliance with relevant national law in respective jurisdictions. ESDD concluded that the Company's operations and the proposed proceeds are unlikely to be associated with significant environmental and social impacts.
The Company has integrated Energy & Environmental Management System in place. The Company is accredited with ISO14001. Hazardous substance and waste management is in place. The Company has all necessary environmental permits in place for its operations. Human resources, occupational health & safety (OHS) and environmental policies and practices are in compliance with relevant laws and EBRD PRs. An analysis on the labour retrenchment issue was carried out on the Company's previous retrenchment activities. The Company has also collective agreements with the labour unions; the Company’s management of this issue and related stakeholder engagement with employees are satisfactory. OHS training and monitoring including for working at height is in place. Proposed operations in Kosovo under the Bank's financing will be covered by the Company's existing corporate environmental and social policies, including management of any employment impacts.
The Client is required to continue to apply their environmental and social policies in compliance with the national laws and PRs, and submit annual environmental and social reports to the Bank. An Environmental and Social Action Plan was not applied for the project. The Company discloses its environmental and social performance in its annual corporate report.
Any comments or concerns can be brought to the Company’s attention in writing to Telekom Slovenije d.d., Cigaletova 15, 1000 Ljubljana, Slovenia. All grievances will be acknowledged within legally or internally prescribed deadlines.
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