Wednesday, Jul 26, 2006

(Updates with how MTC will use credit facility and with comments from MTC's managing director and deputy chairman Dr Saad Al Barrak.)

KUWAIT (Dow Jones)--Telecom giant Mobile Telecommunication Co. (TELE.KW) says it will use its $4 billion credit facility to finance its expansion, which includes bidding for the third mobile operator in Saudi and making forays into another five African nations, including South Africa.

"We are on the same plan we have three years ago - to be a global company. We are planning to get the third license in Saudi, and are working on a long-term license in Iraq," said Dr Saad Al Barrak, MTC's managing director and deputy chairman.

Al Barrak says it is also applying to extend its mobile license in Iraq. MTC currently has 2.5 million customers in the country and its current three-year license expired recently. It is now seeking a fifteen-year extension.

MTC, which already operates in 15 African nations, is looking to boost its expansion to at least 20 countries on the continent in the next two years, Al Barrak added.

Excluding Sudan, African customers make up some 62% of its 22.9 million customer base.

MTC acquired the other 61% shares it did not own in Mobitel Sudan last February, and bought 65% of Vmobile in Nigeria.

"Africa is our promise land, we are a leader in Africa and we will continue to be that. We are targeting the top 20 economies in Africa, and now we plan to go to Angola, Senegal, Ghana, Ethiopia, and South Africa," Al Barrak said.

MTC signed a $4 billion credit facility in Kuwait Wednesday.

It is the biggest ever corporate loan in Kuwait and the second largest in the Gulf Cooperation Council region. A total of 39 lenders from 16 countries participated, including ABN AMRO Bank (ABC.BH), Arab Banking Corp., State Bank of India (500112.BY) and Mizuho Bank. BNP Paribas (13110.FR), Calyon, Credit Suisse, and UBS were the book runners, and NBK Capital was the financial advisor for the deal.

The deal is a "revolving bridge syndication", meaning that the margin will go up and down according to the company's performance. The facility was priced at London interbank offered rate plus 85 basis points, said Julian van Kan, BNP Paribas' head of loans syndications and trading.

Initial response to the facility has been enthusiastic.

"Especially so when it hit the market about the same time as Etisalat's $3 billion. MTC is a year five year deal, Etisalat is the three year transaction, so it's a longer term for the banks to be committed," said van Kan.

Apart from the book runners, eight banks and financial institution joined the syndication at mandated lead arranger level, each with commitment of $200 million.

Lead arrangers meanwhile commit to $100 million, five lenders at arranger level commit $50 million, and the 14 co-arrangers have a commitment of $35 million or less.

-By Sara Ismail, Dow Jones Newswires, +965 934 9692; djnews.dubai@dowjones.com

(END) Dow Jones Newswires

07-26-06 0828ET

Copyright Zawya Dow Jones Newswires 2006