11 October 2011
Ukrtelecom (UX: UTLM UK, BUY) attracted a USD 250 mln loan from Sberbank, the bank reported yesterday via Interfax. The loan is divided into two tranches of three and five year maturities. Proceeds will be used to refinance existing loans, and finance capital investments and working capital. Yegor Samusenko: We believe around USD 170 mln of this loan will be used to refinance Ukrtelecom’s loan from Credit Suisse First Boston and Deutsche Bank, while the rest will be used for CapEx in broadband. Even though the interest rate on this loan was not disclosed, we deem this news as positive for the company, as it demonstrates its ability to attract financing in current markets. The company was privatized in early 2011 with its EBITDA barely below its annual CapEx needs; we expect the new management to turnaround the company over the next 2-3 years.