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

  • First Khmer woman to pass out of West Point

    The life of a soldier certainly isn’t for everyone. The training is gruelling, the hours long and there’s no room for excuses. On top of that, soldiers must be ready to respond to sudden threats at a moment’s notice. Just ask Sithyka

  • Tourists urged not to skip trip

    The Ministry of Tourism has called on international tourists not to cancel trips to Cambodia, but urged them to adhere to several dos and don’ts when arriving in the Kingdom during the Covid-19 pandemic. The ministry released an eight-point instruction manual on Wednesday published

  • The taxman cometh – Cambodia’s capital gains tax casts the net on individual taxpayers

    In a country where only limited personal income tax existed, the new taxation law beginning January 1, 2021, will make taxpayers out of Cambodians, whether they are ready for it or not About two years ago, a little known amendment was made to Article 7 of the Law

  • Cambodian-American gets Star Trek treatment

    Kevin Ung, a Cambodian-American whose family escaped genocide during the Khmer Rouge’s reign of terror, was recently selected from thousands of applicants to participate in the Television Academy Foundation’s inaugural 2020 Star Trek Command Training Programme, a course intended to give hands-on filmmaking experience

  • Cambodia seeks to be transport hub

    Cambodia is working on several fronts to modernise its transport infrastructure and services, concentrating on opening new international gates to relieve and balance traffic congestion at its borders, Minister of Public Works and Transport Sun Chanthol said on Thursday. This is part of the Kingdom’

  • Deminers unearth ancient lion statue

    Cambodia Mine Action Centre (CMAC) director-general Heng Ratana told The Post on Tuesday that a statue of a lion was found by mine clearance experts while they were digging for a development project. It was sent to the Ministry of Culture and Fine Arts last