Logo of Phnom Penh Post newspaper Phnom Penh Post - Royal repays $421m loan early

Royal repays $421m loan early

Royal repays $421m loan early

biz_cellcard_baxter
Traffic passes by the Cellcard service centre on Sihanouk Boulevard in Phnom Penh in December of last year.

The Royal Group has repaid a US$421 million loan it used to buy Millicom International’s majority stake in CamGSM four months earlier than required.

A November 2009 deal saw the Cambodia conglomerate gain full control of CamGSM – which operates a mobile phone network under the Cellcard brand – by purchasing its partner’s 61.5 percent holding.

It also gained a share in Cambodia Broadcasting Service, which operates the CTN television channel, and Royal Telecom International, an international gateway for overseas calls to the Kingdom.

Last November, the group agreed to a $591 million loan from the Bank of China which refinanced the previous loan arranged by Standard Bank and ANZ Bank.

The deal, believed to be the biggest of its kind in Cambodian history, enabled the Royal Group to pay back the $421 million on Friday as well as fund future capital expenditures.

Royal Group Chief Financial Officer Mark Hanna confirmed today that the first loan had been repaid in full, four months earlier than was required, adding the move enhanced the reputation of the firm and its chairman, Kith Meng.

“Royal Group has proven that large debt deals can be structured securely in Cambodia with the lenders getting repaid,” he said.

“Very few financial institutions had a ‘book’ on Cambodia prior to the original transaction and there was no precedent for the structuring of the deal or the security.”

“This is a landmark deal for Cambodia and the confidence of the lenders has been justified by the early repayment of the loan,” Royal Group chairman Kith Meng said in a statement released today.

Royal Group officials declined to reveal interest rates on either loan today, but said the Bank of China loan was a longer-term, lower-interest arrangement than the original.

Lenders involved in the $421 million loan package said they were satisfied with the repayment.

Investment fund Leopard Capital had contributed $5 million to the original $421 million loan facility.

The repayment constituted its first investment exit since the fund’s launch, according to a company press release today.

Managing partner Scott Lewis declined to reveal the profit Leopard Capital had made from interest and fees, as different lenders had received different terms, but told The Post “we’re happy”.

The fund would likely steer clear of future equity investments in mobile phone providers, according to Lewis, partly due to the current competition levels in the Kingdom’s sector.

But the company was considering investing in internet service providers, particularly wireless providers, he added.

“There’s room for better, faster internet,” he said.

“Cambodia will leapfrog right to 4G-type service.”

MOST VIEWED

  • Reuters: US Embassy fired 32 staff members for sharing pornography

    The United States Embassy in Phnom Penh has fired 32 non-diplomatic staff members who were allegedly caught exchanging pornographic images and video, including of minors, according to the news agency Reuters. Four sources, who spoke on condition of anonymity, told Reuters the content was shared in

  • Our 2018 guide to spending Khmer New Year in Phnom Penh

    Khmer New Year festivities are upon us. For the next few days, travellers will be making their way to their home provinces to eat, celebrate, play traditional games and visit a pagoda with offerings. If you will be staying put in Phnom Penh for the

  • US think tank warns of China's 'ulterior motives'

    A US think tank on Tuesday warned that spreading Chinese investment in the Indo-Pacific follows a pattern of leveraging geopolitical influence at the expense of the nations receiving investment, including Cambodia. The report looks at a sample of 15 Chinese port development projects, noting that the

  • More than three tonnes of ivory reportedly bound for Cambodia seized in Mozambique

    A total of 3.5 tonnes of ivory reportedly bound for Cambodia was seized by authorities in Mozambique late last week, according to the NGO Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). CITES' information was based on a report from the