With a view to expand cooperation with a major telecom holding, Vneshtorgbank (VTB) has set a single credit limit for Svyazinvest and its subsidiaries amounting to USD1 billion.
This limit settlement will provide the Holding companies with a wide range of VTB services in financing current and investment needs, export-import operations, in particular, foreign fund raising and a full spectrum of instruments accepted in international banking practice. The limit stipulates long-term credit operations up to 7 years.
New credit conditions will facilitate implementation of a two-year financial strategy, set by the Holding in the current year, aimed at decreasing debt load on Svyazinvest subsidiaries. The structure optimization and maturity extension will have positive effect on financial indicators of the enterprises, making investments in fixed assets and industrial capacity modernization. This will increase investment attractiveness of the telecommunication market in whole or Svyazinvest in part.
The first step to implement VTB decisions was its participation in financing Southern telecommunication company (STC), being part of the Holding. VTB will grant a guarantee against the loan from Credit Suisse worth USD125 million, attracted by STC for 7 years.
Cooperation between VTB and Svyazinvest started in 2002 and now VTB has become one of the main financial institutions providing banking servicing to the Holding. Vneshtorgbank and several Svyazinvest subsidiaries signed cooperation agreements, based on long-term partnership.
Telecommunication Investment JSC (Svyazinvest) is one of the largest telecom holding companies in the world. Its share capital was formed by consolidating shares owned by the federal government in regional telecom operators, set up in the course of telecom sector privatization. Svyazinvest incorporates 7 large intra-regional telecom operators, 4 open joint stock companies, which are not involved in the intra-regional holdings, OJSC Giprosvyaz and OJSC Rostelecom, national domestic long-distance and international operator. Regional holding companies operate public telephone networks with installed capacity over 36.1 million telephone lines (as of 1 January 2006). Holding companies have licenses for local, domestic long-distance and international telephone services, data transmission, etc. They also provide ISDN services, wireless subscribtion access and mobile services.