Wataniya Mobile signed a U.S. $125 million syndicated loan agreement with the International Finance Corporation (IFC) and a number of local and regional banks to finance the build out of its mobile network in the Gaza Strip, and the expansion of its existing network in the West Bank. The signed loan will also be used to re-finance an existing syndicated loan.
The IFC secured U.S. $50 million of the total loan amount, while the rest was covered by Bank of Palestine, the Housing Bank for Trade and Finance, Qatar National Bank, Cairo Amman Bank, Palestine Commercial Bank and HSBC.
The signing ceremony was attended by His Excellency the Minister of Economy, Mr. Jawad Al Naji, and her Excellency the Minister of Telecommunications and Information Technology, Dr. Safa Nasser Eldin, in addition to representatives from the IFC, participating banks, Qatar Telecom, Palestine Investment Fund and Wataniya Mobile.
"Telecom services are a vital part of everyday life, and lowering the cost of communication and improving service levels will contribute to the continued economic development of the West Bank and Gaza" said Dimitris Tsitsiragos - IFC Vice President for Europe, the Middle East and North Africa. "Wataniya Mobile has already demonstrated that the private sector can thrive and make a difference in the lives of people living in challenging environments".
Highlighting the importance of the newly signed agreement, Wataniya Mobile’s Chairman, Dr. Mohammad Mustafa said: "This agreement reflects the considerable level of confidence Wataniya earned from prestigious financial institutions such as IFC, and the participating local and regional banks. Wataniya has proved itself as a leading telecommunication company that has earned the confidence and trust of over 500 thousand subscriber.”
Dr. Mustafa added: "this loan will increase Wataniya’s competitiveness, and will stimulate significant growth and development in the telecommunications sector. It will also contribute to the creation of healthy competition, which will ultimately lead to better and more affordable telecommunication services."
Dr. Bassam Hannoun, CEO of Wataniya Mobile, expressed his delight at the signing of the agreement by saying: "This loan reflects the commitment and keenness of Wataniya Mobile to develop and expand its coverage to various parts of the country, particularly the Gaza Strip. This step is in line with the company's objective of providing high quality services to subscribers across the country."
Dr. Hannoun added: "Wataniya continued to achieve positive results, its subscribers base reached over 511 thousand subscriber by the end of the 1st quarter of 2012. Wataniya financial results for the 1st quarter of 2012 exceeded budget, where Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) grew by 255% compared to the same period in 2011".
Mr. Fadi Abdellatif - Finance Director at Wataniya Mobile explained that: "The new loan has been structured into three tranches, in accordance with the loan’s objectives; The first tranche will be used to refinance the outstanding balance of the old loan and to finance the expansion and development plans of the company’s network in the West Bank. The second tranche, will be utilized to finance the network build out in the Gaza Strip, which is the primary goal of the new loan, once permission to enter the necessary equipment has been obtained. The third tranche aims to finance part of the requirements for the launch of third generation services (3G). Furthermore, the new loan provides the company with greater flexibility to manage its business compared to the old loan that was arranged in 2008, when the company was in its pre-launch phase and had not yet received the required frequencies, all of which coincided with the occurrence of the global financial crisis at that time".