Analyst: Telecom Egypt loan will contribute to debt restructuring

Analyst: Telecom Egypt loan will contribute to debt restructuring
Analyst: Telecom Egypt loan will contribute to debt restructuring

According to the statement, First Abu Dhabi Bank and Mashreq Bank acted as marketers, main arrangers and guarantors to cover the loan. A number of banks participated in its financing.

Telecom Egypt obtained a similar loan in 2018 with the same value -500 million dollars – and with the same banks arranging the loan, in order to convert its short-term dollar debts into longer-term loans, according to a previous statement from the company.

The company’s indebtedness has increased significantly in recent years after obtaining a mobile operating license in 2016 in exchange for 7.08 billion pounds (451 million dollars), half of which is paid in dollars, which the company borrowed to finance, according to press reports.

loan objectives

Eman Marei, a financial analyst at Arab African Securities Brokerage, said in a telephone conversation with Zawya Arabi from Cairo, which follows the company, that “the new loan will help the company in pumping more investments in infrastructure and refinancing the short-term credit facilities amounting to 17.8 billion pounds ( $1.1 billion) by the end of the first half of this year.

She added that “the new loan comes within the company’s plan to structure its debts and extend the term of the short facilities so that the installments are commensurate with its cash flows, and this relieves pressure on its financial position.”

The ratio of the company’s net debts to total equity at the end of the first half of this year reached 47%, compared to 22% in 2017, according to Iman.

The company’s CEO, Adel Hamed, said in a statement today that the loan was covered 2.7 times, and that its goal is to convert short-term facilities in US dollars into long-term loans, and that it comes as part of the company’s debt restructuring process.

And the Arab African analyst believes that Telecom Egypt “has promising growth opportunities, especially at the present time with the Corona conditions, which have increased customers’ consumption of the Internet, as well as with the population growth in Egypt.”

She said, “The company’s spending on infrastructure will help it strongly increase its revenues, especially since the market still offers great growth opportunities, as the percentage of Internet use in Egypt reached only 57.3% at the end of 2020, compared to 47% in 2018, according to the data of the Ministry of Communications. “.

About Telecom Egypt

A listed company on the stock exchange, and it works in the field of terrestrial, mobile and Internet communications services, with a history of more than 160 years. The government owns 80% of the company’s shares, and the rest is traded on the stock exchange. Telecom Egypt owns 45% of Vodafone Egypt.

(Prepared by Abdel Qader Ramadan and Abdel Qader works on the Masrawy Al-Masry website and previously worked in several institutions, including the Thomson Reuters Foundation’s Aswat Masriya website, the Egyptian Stock Exchange, and the Egyptian CBC satellite channel)

(Editing: Yasmine Saleh, contact: [email protected])

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