Dialog Telekom Receives US$100million From IFC To Support Sri Lanka's Telecom Infrastructure
27 Sep 2007, Kuala Lumpur -- Dialog Telekom PLC, Telekom Malaysia Berhad's (TM) subsidiary in Sri Lanka has received financing from International Finance Corporation (IFC), a member of the World Bank Group, to expand its telecom network and build new telecommunication infrastructure networks. The financing package marks the second time IFC has committed towards supporting Dialog's growth and expansion.
The US$100 million package includes a US$ 70 million term loan facility and a US $30 million equity commitment via the acquisition of a 1.6 percent holding in Dialog from TM, through TM International (L) Limited. The loan facility will enable Dialog to improve public access to affordable and reliable telecommunication services by increasing capacity and extending coverage, particularly in rural and under served areas. The US $30 million equity commitment will also facilitate a potential improvement of liquidity for Dialog shares in the market.
The funding will be deployed towards partially financing Dialog's "quadruple play strategy". A significant portion of the proceeds via the debt financing will be channeled towards augmenting coverage and capacity in the mobile network in order to consolidate and grow market leadership and product leadership in the segment. Investments will also be made in the Fixed line, Broadband and Digital Television media businesses. These beachhead investments would establish a solid platform for the Dialog group to benefit from the burgeoning mobile market as well as from growth in relatively under served segments such as Broadband Internet, Enterprise Solutions, Fixed Telephony and Digital media leveraging on infrastructure and convergent technology platforms.
Commenting on the IFC facility, Dato' Abdul Wahid Omar, Group CEO of TM said : This is indeed good news. This exemplifies continued confidence in Dialog, the market leader in Sri Lanka. It clearly emphasizes the strong growth potential of Dialog and is testament to the tremendous value that Dialog has brought to customers in Sri Lanka."
Yusof Annuar Yaacob, Chief Executive Officer of TM International Sdn Bhd, Dialog Telekom PLC's majority shareholder, said, "IFC's renewed support to Dialog at a critical juncture in its expansion is very encouraging and contributes significantly to our commitment to investing over US$450 million in Sri Lanka over the period 2006 to 2008."
Dr. Hans Wijayasuriya, Director and Chief Executive, Dialog Telekom, added, "We are delighted that IFC has reinforced its commitment to Dialog's growth story. Building on the relationship seeded in 2004 through a long term financing arrangement, we are strongly encouraged that IFC has increased its participation in Dialog in the form of equity and expanded debt financing. We are also appreciative of the high degree of market sensitivity displayed by IFC in structuring a tailor made financing package to meet the company's needs and opportunities"
Paolo M. Martelli, IFC Director for South Asia, said, "IFC's support to Dialog, comprising both long-term finance and advisory services, is an important milestone for our presence in Sri Lanka. It demonstrates our commitment to facilitating private sector development, which in this case will help address the country's growing infrastructure needs."
Telekom Malaysia Berhad (TM), a leading regional information and communications group, offers a comprehensive range of communication services and solutions in fixed-line, mobile, data and broadband. As one of the largest listed companies on Bursa Malaysia with an operating revenue of more than RM16 billion, TM is driven to deliver value to its stakeholders in a highly competitive environment.
The Group places emphasis on continuing customer service quality enhancements and innovations. Currently, with investments and operations in 13 countries around Asia and globally, TM is focused on sustainable growth in both the local and international markets.
On the Corporate Social Responsibility (CSR) front, the Group has always been a major corporate contributor towards responsible activities in the belief that these practices are a fundamental tenet of good corporate governance. The Group promotes 3 major platforms i.e. education, sports development and community/nation-building. Under education, TM has spent some RM800 million to develop Multimedia University into one of the top universities in Malaysia with more than 20,000 students. TM has also provided scholarships to over 10,000 graduates pursuing academic programs locally and overseas. On the sports front, TM is actively contributing towards the upliftment of football at all levels while under the community/nation-building platform, the Group contributes towards causes that bring value to the community and nation at large.
For further information on TM, visit www.tm.com.my.
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC's vision is that poor people have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through loan participations and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org.