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European banks boost telecoms competition in Croatia
The telecommunications company VIP-Net GSM has received a EUR 120 million loan from a group of European banks to construct and operate the second national GSM 900 mobile phone network in Croatia. The financing will contribute to the development of a more efficient, reliable and user-oriented telecommunications infrastructure in Croatia and will lead to much-needed competition in this fast-growing sector. Creditanstalt AG is lead arranger, while the European Bank for Reconstruction and Development (EBRD) is joint arranger.
The financing consists of a EUR 77.6 million syndicated loan, guaranteed by export credit agencies (ECAs) OeKB (Austria) and EKN (Sweden), with parallel loans of EUR 22.4 million from the EBRD and EUR 20 million from the Nordic Investment Bank. Creditanstalt AG is providing a EUR 20 million loan as part of the international syndicate of banks.
"The arranging process proved quite challenging, given the circumstances and the intricacies of raising infrastructure financing in Croatia," said Martin J. Frank, Head of International Project Finance at Bank Austria Creditanstalt. "The early decision to bring in multilateral and ECA support was instrumental in making this financing possible."
Peter Reiniger, Business Group Director of Industry and Commerce at the EBRD, said: "Cellular technology offers fast access to telecommunications services throughout the country. This project is an important step in the liberalisation of the Croatian telecommunications sector." He added: "Furthermore, the project is part of the EBRD’s strategy for the economic recovery of the region. The EBRD will continue to contribute to the stimulation of private investment and the development of regional infrastructure in south-eastern Europe."
The other participating banks are ABN Amro Bank NV, Bayerische Hypo- und Vereinsbank AG, Bayerische Landesbank Girozentrale, Erste Bank der Österreichischen Sparkassen AG, Leonia Corporate Bank PLC, Raiffeisen Zentralbank Österreich AG and Swedbank Föreningssparbanken AB.
"This is a good example of the type of cooperation between international financial institutions, export credit agencies and commercial banks that we would like to see repeated," said Lorenz Jorgensen, Head of Commercial Co-Financing at the EBRD.
VIP-Net GSM is a Croatian limited liability company incorporated in 1998, which won the second national GSM licence in Croatia following an international tender. The sponsors are Mobilkom, founded in 1996, which is the leading Austrian mobile operator with over 1.5 million subscribers, and Western Wireless International, the international arm of Western Wireless Corporation, a US based mobile communications company formed in 1995.
Creditanstalt AG is part of the Bank Austria Creditanstalt Group, with total assets of EUR 122 billion. In addition to its core markets, the Group regards central Europe and parts of eastern Europe as its extended home market. With over 330 offices, more than 3,500 employees, combined operating turnover of EUR 145 million, a return on equity of over 20 per cent and total assets of more than EUR 5.2 billion in the region, the Group is a leading bank in central and eastern Europe.
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