Telecom Egypt in talks with banks for dollar tranche of the 4G loan

Egypt’s state-owned landline monopoly Telecom Egypt is negotiating a $180 million tranche of a loan worth 13 billion Egyptian pounds arranged by five local banks to cover the 4G licence acquisition costs.

In August last year, Telecom Egypt signed a deal to buy a 15-year fourth-generation mobile licence, which will cost licence the company 7.08 billion Egyptian pounds, of which 5.2 billion pounds was paid in advance, half of which in dollars. The company had secured a bridge loan arranged by the NBE and CIB to pay for the first instalment of the 4G licence.

Telecom Egypt reached in September 2016 a loan agreement with a consortium of five banks; the National Bank of Egypt, Commercial International Bank – Egypt (CIB), Banque Misr, QNB AlAhli Bank, and Crédit Agricole to pay for the 4G licence.

The consortium agreed to secure 5 billion Egyptian pounds at the beginning but later approved Telecom Egypt’s request to arrange 13 billion pounds.

Telecom Egypt had requested the five banks for some amendments to the loan agreement, including having a dollar-dominated tranche equivalent to 3.240 billion Egyptian pounds in addition to 8 billion pounds in local currency, a senior banking familiar with the matter said Tuesday.

The amendments also included providing the company an additional 1.760 billion pounds if needed to be a supplement to the 13 billion pounds loan, the source further told Amwal Al Ghad.